OT:Fed's Bailing out Fannie/Freddie

I see an AOL news posting at about 8:30pm eastern time that the Feds have announced they are shoring up Fannie, and Freddie. Well I think things are finally getting to where all of you have said we are going.

Buy Buy By

We, (taxpayers) started bailing them out the second they were formed by congress. These deals were set up to fail on their own but they will fail like all the other ignorant programs. That is, they won't really fail, just the US citizens will have to bail them out.

Save a few hundred bucks folks. When hard times hit, the first thing to go is uncle chucks rusty old tractor. I cant do much with mine because of money, but i can play with them and simply have them. My 2 cents

Save a few hundred bucks folks. When hard times hit, the first thing to go is uncle chucks rusty old tractor. I cant do much with mine because of money, but i can play with them and simply have them. My 2 cents

Maybe we should create a new "Department of Bailouts".

check your news paper this is a public owned company traded on the stock exchange. not every thing posted on aol is fact.LOL

patrick.net is a blog concentrating on the mortgage mess; it posts links to items in various publications around the country, and connected real estate comments sent in by readers, usually 15-20 every day, and has links to other mortgage/real estate crash sites.
There'll be several about bailing out Freddie and Fannie, something the whole industry (well, almost) would've laughed at 6 months ago.
If you go there, remember it concentrates on gloom, doom and utter catastrophe, and things probably won't get that bad...I hope...

Next the Government will bail out my dirt track racing enterprise. Then they can establish a long term subsidy program for all dirt track racers.

Why? Because we are sooooooo entitled!

Just make to save it in gold form

I've been wanting a Powered Parachute for a long time, think I can get someone in the Fed to buy me one???

Well actually, I have been wanting a big tricked out 1206 Farmall with all the turbo's , etc to go pull with, think I could have one of these???


Gene

Keep that rust bucket, if the USA goes down the tubes the only thing of value (that will sky rocket in price) will be natural resources. Things like gold, steel, aluminum, corn, beef, oil, etc.

Oh wait... that's already happening... RIP America.

IIRC, I did a statistical analysis a while back that showed the average price for any given resource TRIPLED in cost from 2002 to 2006. My data set didn't have the numbers for 2007 and 2008, but I'm sure it's still going up up up. The next depression might be just around the corner, are you ready for it? If your not self sufficient or rich your going to be in a world of hurt.

Investors in the stock market should be the ones shoring up Fannie mae and Freddie mac. The stock price is down, a lot I guess. But with this type of thinking then General Motors should also be shored up with tax money because they are important to the USA economy. and Ford Too...And this company and that company.
Where do the bailouts end?

There's 90 banks that are in trouble, but there's probably more than they're saying. This sounds like the Big Depression. It's hard to believe that those banks gave mortgages to people
with no income, no collateral and no money for closing costs and down payment. I wonder if the banks were given instructions to give anyone a mortgage from Wahington? When I bought a home with a VA loan I had to show 1040's for last 2 years to show income and get a statement from my employer stating how long I had been employed and if I had career status. Hal

Its Gov't business as usual taking $$$$ from the
responsible members of society and giving it to the irresponsible.

It was inevitable. The biggest problem in the "great depression" was total dry-up of credit, and everything ground to a halt. Guvment knows we can't afford to let that happen again, and if they handle things right (shore up the mortgage crisis, but tighten credit standards enough so only those actually credit worthy can borrow), they just may pull it off.

But wait! In other news, FHA is said to be returning to relevance in the mortgage market. This means that even if conventional lenders are forced to tighten up, FHA will be there to guarantee loans with 3% down (usually fronted by the seller, by jacking up the price by that 3%), so the purchase of unaffordable homes will continue. Seems that the lib's need to give everyone a piece of the American Dream trumps everything else, including common sense.

The 3% has to be paid by the buyer. Jacking up the selling cost does nothing, when the 3% still has to come in down payment form FROM THE BUYER!!!

Good post Mike. We don't want to see credit markets come to a halt.

The Great Depression was just the last major financial panic to hit the U.S.

Numerous panics in American history had produced far greater hurt on the nation then any recession since. We can thank our modern banking system and willingness for federal intervention for eliminating those crippling panics.

Deregulation, on the balance, has been good but obviously there are areas it got way too slack. Returning to 1970s style regulations, the stuff that produced gas line shortages; wage controls; and the 55mph speed limit are not the solution.

But we do need a traffic cop. As I posted elsewhere here, when you see no income verification or the 40 year interest only mortgage...someone should've been the traffic cop pulling over the Corvette going 155mph. Somethings are just so stupid and endanger others enough you do need to stop them before they crash.

Maybe that's the case now, but there used to be all kinds of techniques. Common to see Purchase and Sale Agreements providing that "Seller will pay a portion of buyer's costs, up to 3% of sale price."

Also, incredibly, buyer didn't have to have his own down payment if it was contributed to him by a non-profit corporation. The idea was for something along the lines of grants, etc. Well, someone figured out that loophole in short order, by starting a non-profit corp. FOR THE EXPRESS PURPOSE of accepting "contributions" so they could then give them to buyers, less a modest fee, of course. No restrictions on who could make the "contributions". So if the appraisal came out high enough (and most of them did- the appraisers know which side their bread is buttered on), seller would "contribute" enough for the down payment. Whole thing done within the escrow. So, seller wants $200,000; appraisal comes in at $225,000; They change the sale price to $225,000, Seller "contributes" $25,000 to ABC Corp, which then gifts it to the buyer, less $2000 for handling. Buyer pays $20,000 down on the the $225,000 property (more than enough to qualify for a mortgage in those halcyon days) and gets $3,000 back from closing to boot; Seller gets $205,000 which is 5 grand more than he was expecting; Scammer corporation gets $2,000 just for being there, and everyone is happy. Except possibly the mortgage holder, who's now stuck with a $205,000 mortgage on a house that's now worth $150,000, whose owner has walked because he's now "upside down" in the deal, and his interest rate just went up, and what the heck, he didn't have anything in this deal anyhow, so what's the incentive to stay? And that, boys and girls, is the stuff of which mortgage meltdowns is made.

Evening news told about the fannie type banks were having 100 million dollars a day with drawls. Sort of modern day bank run.

Greedy types on both sides of the desk. Juice loans comes to mind.

The house thing got it start in Stockton, CA. The home buyer just made up a income number and was not looked at to much. The values really jumped for a few years and owners come in a sucked out the new margin value and just walked away. The notes were bundled in Hedge funds world wide. The loan bank never held any paper just collected the payment while they were made.

The Fannie type are investment tools for huge retirement type paper.

The gov is in a place of no return. Must save the sorry banks. FDIC insured up to the limit for each account anything above is gone.

The Feds can drop prime to one point and you will see no change.

The happless margin home owners will have to take a lickin and move on.

Nothing is now almost all is built one brick at a time. Bring back the draft?