As Loan Giants Are Inspected, Bush Prods Congress

[groovedaddy]

Bank examiners from the Federal Reserve and the Comptroller of the Currency are inspecting the books of the nation’s two largest mortgage finance companies, Fannie Mae and Freddie Mac, as the Bush administration prods Congress to approve a plan that would enable it to inject billions of dollars into the companies.

http://www.nytimes.com/2008/07/22/business/economy/22treasury.html?th&emc=th

[Hydra]

1. "Ya, we may have screwed up, but we still need taxpayer money!"

Socialized loses, privatized gains.

:puke:

[sinkingfeeling]

2. Do you have a mortgage?

[Hydra]

4. We did

And due to a divorce we lost it- but not until after we paid them more than twice the house was originally worth.

Even the low income USDA program I looked into would be an extra $10,000 a year in interest for me to buy a low income home for myself and my disabled mother.

I have no sympathy for such a scam.

[sinkingfeeling]

5. Most single-family homes in this country are financed via Fannie Mae. You may go to any

lending bank, mortgage firm, or credit union and apply for a range of mortgages (ARMs, conventional, FHA, VA, etc.) but the capital is coming from one of the GSEs. They currently hold the majority of all private mortgages. Fannie Mae was not directly involved in the sub-prime business and at the end of last year had only .98% of its mortgages in default.

You said that you 'paid them more than twice (sic) the house was originally worth' and I certainly hope you meant that the total interest that was made on the mortgage made the repayment about double the cost of the home. This is the effect of compounding interest across 30 years of payments. That is why it is advisable, if you can swing it, to go for 15 year fixed mortgages or to make an additional principle payment each month.... both saves tens of thousands in interest charges.

You do realize that without Fannie and Freddie there would not be any HUD or USDA low income homes at all, right?

[Hydra]

6. Perhaps you should see the source of my outrage in this matter:

http://en.wikipedia.org/wiki/Fiat_currency

The Fed and all the lenders authorized by it may create these loans with no actual money, and yet we are being asked to bail them out.

How is this supposed to make sense?

On top of that, they are allowed to charge interest despite the fact that they put no money of their own into this.

And as for what we paid, we wound up paying interest for over 10 years and almost all of the sale cost to eliminate the debt. The interest rate was 10% and despite being assured that we could refinance after the first 2 years, we were never able to get approved for it.

And you might find this of interest:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x40971

Can we say, "Gov't sponsored ponzi"?

[sinkingfeeling]

7. The Wiki entry is bull. Shareholders buy and sell Fannie Mae stock, the captial is provided by the

sale of mortgage-backed securities to really, really large institutions, among which are the countries of China, Scotland, and Brazil. Key here is 'sale', meaning they pay money.

Interest is charged by anybody who loans money to others. I doubt if you'll find many places to borrow thousands of dollars without interest on the loan.

[Hydra]

8. If you don't want to understand basic economics, that's fine with me

But where do you think the Fed gets the money to lend? They are authorized agents of Congress vested with the power to create currency, and that currency is backed by nothing more than legal order that it must be accepted "For all debts, public and private."

We have a fiat currency- we went off the gold and silver standard decades ago. We have also rejected the fractional reserve system, meaning that you can loan any amount with no monetary backing.

This is all an open secret. Read the information and read how the financial system ACTUALLY works before you defend the bailout of a company that doesn't need it.

--------------------------

Edit:

You're probably plugging your ears, but here's a good tidbit for you:

The $5 trillion in owned or guaranteed mortgages at the two companies is backed by less than $100 billion in actual capital. That's leverage of 50-to-1.

http://articles.moneycentral.msn.com/Investing/JubaksJournal/TheHugeThreatToTheUSEconomy.aspx

They were borrowing all of that money from the Fed at a special rate, who in turn was creating that money from thin air.

Now are we starting to get the picture?

[sinkingfeeling]

10. So you want to go back to the gold standard? I'm sorry but this is the current system and without it

there would be a whole lot more people without homes in this country. Borrowing and lending money and 'leveraging' is all a part of the current system.

[Hydra]

11. You're either being dense or trolling, now

Why should we pay $300 Billion to bail out $100 Billion of capital? Are you volunteering to do that yourself?

If you are dead set on keeping the system in place(And kindly admit your error about the Wikipedia article), then burn Freddie and Fannie to the ground and allow the Fed to provide those funds at a fixed rate directly to the banks. If the banks price their customers out of their homes, let them fall. Other banks will rise to take their place.

Free market, or socialism- pick one, not a grotesque mix of the two which benefits the investors. We've already seen how it doesn't benefit the would-be homeowners.

[sinkingfeeling]

14. Your claim that Fannie and Freddie haven't benefited would-be homeowers is totally bogus.

Close to 8 million people have had mortgages underwritten by Fannie, reducing the interest rate on those loans by about .5%, saving an estimated $23 billion in consumer paid interest. Fannie and Freddie have met their goals set my Congress for ending discrimination in the marketplace and proving ownership to remote areas and lower-income families.

At this point, with Fannie's stock up from a few weeks ago (providing $20 billion in capital), I doubt if it will be necessary to 'bail' them out.

I guess it's better in your book to see Americans lose their homes ($10.5 trillion).



http://www.truthout.org/article/fannie-and-freddie

[groovedaddy]

3. Read Bill Moyers interview of William Greider

Greider says a bail out is necessary BUT should come with much stronger regulation. Otherwise, the mortgage industry has no reason to change its ways. They know if they get in trouble, help will always be at hand. If we regulate strongly enough, we won't have to deal with this crap.

http://www.pbs.org/moyers/journal/07182008/transcript2.html

[librechik]

9. Hurry, give us all the money before somebody stops us! Hurry, you fucks!

and they no doubt will hurry--as much as they can, on their knees.

[spanone]

12. estimates around TWENTY FIVE BILLION of yours and mine tax money-for a private interprise

[groovedaddy]

13. And what do we get out of it? We get to feel good that MAYBE

we prevented the economy from collapsing.
Investors, this is the place to put your money, as their is no risk to you. If you fail, we will bail!

[salin]

15. if we socialize the costs (tax payers)

that we should socialize a good chunk of the future profits.