Austrian School

Countrywide's Call For Increased Mortgage Limits Must Be Ignored

Well written article. The distorting influence that the GSE's have had on the mortage market would take more than the space I have here to list. And just because conforming loans don't directly apply in the rich high income wealthy coastal areas doesn't mean that they don't have an effect to artificially juice the residential real estate market. Think $400k condos and trade up buyers. The unfair dominance of the conventional market due to their unearned doubious goverment backing pushes private institutions to focus on the riskier areas of lending in which the GSE's cannot directly compete.

If you're buying a house that costs more than half million dollars, you don't need a subsidy from the tax payers. Isn't it ironic that the very GSE's that were supposed to make housing affordable have actually caused huge price inflation? How is this making housing more affordable? You know this is true because the biggest critics of reducing the GSE's say that prices will plunge to affordable levels if you attempt to control them.

It isn't that the jumbo market is illiquid or high priced, its that the GSEs are temporarily selling loans below the real market cost by way of their insurance from tax payers.

Mozillo is looking for a public fool to take over his private bad loans. Mortgage pros are looking to keep the party going just a little longer before they have to go get real jobs.

Countrywide's FHLB Bailout

Its in everybodies long term interests to let CFC succeed or fail on its own merits. A loan from the FHLB is a tax payer subsidy to a private company playing chicken with the economy. Paying articially low risk insurance rates does make it a real market just like a guy that pays his parents $100/month to live in their basement an independant adult. The insurance premium is enough until it isn't, and then they get bailed out. Just like national flood insurance, its self supporting with premiums until their's a major flood, then the program gets bailed out by the tax payers. If the loans given as colateral are anything like the home equity loans I see CFC hawk on TV all day long, then they're seconds and thirds and will likely be worth 0 cents on the dollar in the likely event of a foreclosure.

Bank Coalition Near Accord to Freeze ARMs - WSJ

For every undeserving household the receives an artificially low interest rate to own a home, a prudent one is excluded.

Subprime Borrowers Causing Upside Surprise: What's Happening Here?

Hey Douglas Banker, First this article was about sub-prime, not non-prime with includes alt-a. Second, I call BS on your average income and time on job stats, these are the lies that got these losers the loans in the first place. Third, the sky IS falling, and if you were one of these people that helped himself selling these loans, get some liability insurance.