Page 1 of 2 12 LastLast
Results 1 to 9 of 13

Thread: The Government now "owns" 1/2 of U.S. homes

  1. #1

    Default The Government now "owns" 1/2 of U.S. homes

    The Bush administration, acting to avert the potential for major financial turmoil, announced Sunday that the federal government was taking control of mortgage giants Fannie Mae and Freddie Mac.

    Officials announced that the executives and board of directors of both institutions had been replaced. Herb Allison, a former vice chairman of Merrill Lynch, was selected to head Fannie Mae, and David Moffett, a former vice chairman of US Bancorp, was picked to head Freddie Mac.

    "The companies own or guarantee about $5 trillion in home loans, about half the nation's total."

    http://biz.yahoo.com/ap/080907/mortg...ts_crisis.html

  2. #2
    NCAA Champ ccbig's Avatar
    Join Date
    Feb 2008
    Location
    Minnesota, USA
    Posts
    1,144

    Default Re: The Government now "owns" 1/2 of U.S. homes

    This is a scary sign for the nation's economy!
    If we don't fight hard enough for the things we stand for, at some point we have to recognize that we don't really stand for them.

    ~Paul Wellstone~

  3. #3

    Default Re: The Government now "owns" 1/2 of U.S. homes

    "There is a consensus today ... that they cannot continue in their current form," he (Paulson) said.


    I still don't get how the government can step in and take control of a company, no matter what the economical impact would be... anyone know who ends up deciding, and what if the Heads of Fannie & Freddie had refused a government bailout?

  4. #4

    Default Re: The Government now "owns" 1/2 of U.S. homes

    Quote Originally Posted by Schlottke View Post
    "There is a consensus today ... that they cannot continue in their current form," he (Paulson) said.


    I still don't get how the government can step in and take control of a company, no matter what the economical impact would be... anyone know who ends up deciding, and what if the Heads of Fannie & Freddie had refused a government bailout?
    Interesting question. Then, what happens if Fannie and Freddie roll over? Is there any private agency that would be in a position to absorb $5 Trillion? If the government didn't bail them out, what happens to the housing economy, and the rest of the economy? Total disaster - 1929 style.

    R.I.P. Cyrano and Roxanne.

  5. #5
    NCAA Champ
    Join Date
    Apr 2007
    Location
    Oxnard California
    Posts
    1,131

    Default Re: The Government now "owns" 1/2 of U.S. homes

    Happy to say, they don't own my house. Mortage paid off.

  6. #6
    NCAA Champ ccbig's Avatar
    Join Date
    Feb 2008
    Location
    Minnesota, USA
    Posts
    1,144

    Default Re: The Government now "owns" 1/2 of U.S. homes

    Quote Originally Posted by tpay View Post
    Happy to say, they don't own my house. Mortage paid off.
    Wow! Congrats on that! That is a fine accomplishment!

    I wish I could say the same, we still have many years left on our mortgage.
    If we don't fight hard enough for the things we stand for, at some point we have to recognize that we don't really stand for them.

    ~Paul Wellstone~

  7. #7
    Olympic Champ r.payton@att.net's Avatar
    Join Date
    Mar 2008
    Location
    Danville .Indiana
    Posts
    8,718

    Default Re: The Government now "owns" 1/2 of U.S. homes

    The Federal Reserve Bank was instituted exactly for this reason-THAT the economy would not wildly fluctuate if CONTROLLED by the RIGHT people .

    From an economic standpoint -every child born in the US is roughly $9,000.00 in debt from WW1 loans .

    Does anyone else think this may have been a con job ? The FRB is neither federal, nor a bank, and has never been audited nor does it fall under any Govt. jurisdiction .
    Fl fre to read about the FRB at several hundred different sites -I have yet to find anyone who was not a billionaire who approves of the FRB.
    A perfect example of the power of this THING is seen in Broad Ripple , a town within Indianapolis, the interest rate jumped and taxes subsequently went up and several hundred little old folks WHO HAD PAID for their homes lost them to the TAX man . This occurred last spring , when will it occur next ?

  8. #8
    World Champ ODH's Avatar
    Join Date
    Apr 2007
    Location
    New Hampshire
    Posts
    3,968

    Default Re: The Government now "owns" 1/2 of U.S. homes

    Quote Originally Posted by Schlottke View Post
    "There is a consensus today ... that they cannot continue in their current form," he (Paulson) said.


    I still don't get how the government can step in and take control of a company, no matter what the economical impact would be... anyone know who ends up deciding, and what if the Heads of Fannie & Freddie had refused a government bailout?
    Freddie and Fannie are unique in that they are only nominally private companies. Their credit has always had the de facto backing of the government. Someone who has better understanding of this may be able to explain it better.

  9. #9
    Olympic Champ RYou's Avatar
    Join Date
    Mar 2007
    Location
    New Jersey
    Posts
    8,376

    Default Re: The Government now "owns" 1/2 of U.S. homes

    Washington Post
    By Carol D. Leonnig
    Washington Post Staff Writer
    Tuesday, June 10, 2008; Page A01

    Both are owned by private shareholders but chartered by Congress. They are exempt from state and local taxes and receive an estimated $6.5 billion-a-year federal subsidy because they can borrow money more cheaply than other investors. In return, they are expected to serve "public purposes," including helping to make home buying more affordable.

    HUD Spokesman Brian Sullivan said the agency and the Democratic Congress wanted to increase homeownership among underserved families and could not have predicted that subprime lending would dominate the market so quickly. "Congress and HUD policy folks were trying to do a good thing," he said."

    Since HUD became their regulator in 1992, Fannie and Freddie each year are supposed to buy a portion of "affordable" mortgages made to underserved borrowers. Every four years, HUD reviews the goals to adapt to market changes.

    In 1995, President Bill Clinton's HUD agreed to let Fannie and Freddie get affordable-housing credit for buying subprime securities that included loans to low-income borrowers. The idea was that subprime lending benefited many borrowers who did not qualify for conventional loans.

    In 2000, as HUD revisited its affordable-housing goals, the housing market had shifted. With escalating home prices, subprime loans were more popular. Consumer advocates warned that lenders were trapping borrowers with low "teaser" interest rates and ignoring borrowers' qualifications.

    Back in 2001, HUD researchers warned of high foreclosure rates among subprime loans.
    Life's not the breaths you take, the breathing in and out that gets you through the day ain't what it's all about. It's the moments that take your breath away.

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •