Friday, February 11, 2011

Obama Admin Wants to Get Out of Mortgage Business...In Five Years or So

The FHA, Fannie Mae, and Freddie Mac now own or guarantee 90+% of new mortgages.  And they've done so since the latter two were put into government conservatorship in September, 2008 in lieu of failing.  2 million foreclosures are expected this year, adding to the 7 million foreclosures since 2008.  27% or 15.7 Million of all mortgageholders now owe more than the house is worth.

But while the Obama Admin has taken many steps to privilege and protect TooBigToFail Banks and Banksters by spreading their billions in failure to taxpayers, apparently it's time to Make Some Noise About The Issue.

However, this Treasury "white paper" doesn't make even one recommendation to stop the bleeding.  Instead, it lays out three possible scenarios for putting mortgage lending back in the hands of banks. 

The essential problem with Fannie and Freddie?  Can't live with 'em, can't live without 'em.  It's a peculiar quandary posed by The Real Estate Industrial Complex:
...those who own a home, mortgage or not, want the value to remain as high as possible, lest they lose their investment or even go underwater.  While those looking to buy a home are told that without the Fannie/Freddie blank check guarantee system, they'll never be able to purchase one.

1 comment:

skeptic said...

Everyone knows cville hasn't tanked yet like the rest of the country. Prices still haven't come down in line with the national repeat sales indexes. I just found a repeat sales index that tracks charlottesville specifically.
http://www.fhfa.gov/Default.aspx?Page=86

Here is a graph of Cville
http://www.fhfa.gov/HPIChart.aspx?Area=MSA&AreaID=16820&PurchaseQtr=2000Q1&ValuationQtr=2010Q3&Price=$100,000&nr=

Graph of Virginia
http://www.fhfa.gov/HPIChart.aspx?Area=STATE&AreaID=VA&PurchaseQtr=2000Q1&ValuationQtr=2010Q3&Price=$100,000&nr=

Graph of California
http://www.fhfa.gov/HPIChart.aspx?Area=STATE&AreaID=VA&PurchaseQtr=2000Q1&ValuationQtr=2010Q3&Price=$100,000&nr=

Maybe we'll follow suit, maybe we'll maintain these ridiculous prices because we never got as high. You decide.