Fannie Mae, the government can now be your landlord

[Corn]

Our former Administration and their supporters allowed housing to become a speculative market.

Housing is, and always has been, a "speculative market". LOL @ silly lefties. Pray tell, Jhnnnn, what specific action of Bush was the *cause* of the market meltdown?

 

[glenn1]

Good - keep the serfs in their shitty government quarters and away from the productive class. Maybe we should airdrop some food rations to them once in a while as well.

 

[Jhhnn]

Housing is, and always has been, a "speculative market". LOL @ silly lefties. Pray tell, Jhnnnn, what specific action of Bush was the *cause* of the market meltdown?

How about a little thread crapping, ehh, Corn? It's your specialty, IIRC. Anything to add, other than the usual derision?

Probably not- never is...

But, to answer your question, they and their pals at the FRB let this happen-

http://www.ritholtz.com/blog/2009/07/update-case-shiller-100-year-chart/

Self regulation! ownership society! Free market! Cut red tape! Rah! Rah! Rah!

 

[Corn]

How about a little thread crapping, ehh, Corn? It's your specialty, IIRC. Anything to add, other than the usual derision?

Probably not- never is...

But, to answer your question, they and their pals at the FRB let this happen-

http://www.ritholtz.com/blog/2009/07/update-case-shiller-100-year-chart/

Self regulation! ownership society! Free market! Cut red tape! Rah! Rah! Rah!

That does not answer the question. What *specific* actions did Bush take that caused the bubble.

 

[Red Dawn]

Good - keep the serfs in their shitty government quarters and away from the productive class. Maybe we should airdrop some food rations to them once in a while as well.

You think those who own residential properties fro rent are so great? Think again.

 

[Jhhnn]

That does not answer the question. What *specific* actions did Bush take that caused the bubble.

Deliberately obtuse, Corn, or willfully ignorant?

http://www.washingtonpost.com/wp-dyn/content/article/2008/06/09/AR2008060902626.html

http://www.nytimes.com/2000/02/11/b...s-congress-to-fuel-growth-of-derivatives.html

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/22/AR2008112202213.html

I could cover the page with links, but your mind is obviously made up, actual evidence notwithstanding...

 

[Vic]

LOL this is a completely silly "feel good" program destined to fail and cost the agency orders of magnitude more than had they simply repossessed and sold.

If the "renter" could make the payments on the property, there would be no foreclosure to begin with, therefore how many "renters" will still end up not making any payments. Next problem is that FNMA will still have to market the property for eventual sale, however, since there are now tenants leasing the property for up to a year, you are removing a significant portion of potential buyers who are looking to purchase homes to occupy themselves.

The only positive I can see from this is that it will negate the redemption period and possibly reduce vandalism and theft from the property by the "owners". A much better option would be to simply give the owners cash for the deed and waiver of the redemption period.

Not all foreclosed homeowners are willing to give cash for keys (usually claiming that the cash amount offered is not enough to cover their moving costs), and the length of the redemption period along with the ability of the servicer to evict varies great by state and even county. There are areas in this country where it is more-or-less impossible to evict former homeowners and/or their tenants.
Which is one reason why even private servicers want in on this idea, and not just Fannie/HUD. While I've no doubt that many if not most of these 'renters' will default, I think you forgot that otherwise lenders CAN'T collect anything from foreclosed homeowners short of the full reinstatement amount. At least this way they would be legally allowed to collect something. And I think you missed the part where 'deed for lease' would necessarily require the homeowner to voluntary waive the redemption period.
And as there is a serious excess in the amount of housing inventory in this country at this time, most banks are not opposed to how this would effect the housing supply.

The spin in the OP's article is pretty amusing BTW. More and more, I am coming to believe that there is no real ideology in the US anymore, just partisan puppets held up on strings of spin. This issue, in particular, could be just as easily spun into something the anti-bank left would rage against. But pretend it's just govt agencies involved, and the right gets its panties in a bunch.

 

[bob4432]

The lameness in this thread is almost astounding. As you point out, prices are depressed, rightfully so, because supply exceeds actual demand. No more artificial demand based on liars' loans and teaser rate ARM's, no demand for MBS based on false AAA ratings, either. Our former Administration and their supporters allowed housing to become a speculative market.

If the FRB and Treasury dept hadn't stepped in, many of America's banking giants would be defunct, in receivership, their holdings selling for a nickle on the dollar. Credit would be non-existent. The actual selling price of housing would fall through the floor, and many homeowners would simply abandon their exorbitant payments for (much) cheaper rent from people who had cash to buy foreclosed properties, rent them out at affordable rates.

That can still happen if too much real estate comes onto the market too quickly. Fannie's acting as a landlord is one of many attempts to prevent that from happening. How well it'll work out is anybody's guess.

you don't think the people who bought into these arms are responsible for their own downfall? living on credit instead of within one's means? you seem to want a nanny state, where there is no risk in anything, and with no risk, there is no prosperity and no life. so once again the people who fucked up don't have to deal w/ the consequences. PEOPLE NEED TO LEARN TO TAKE RESPONSIBILITY FOR THEIR ACTIONS AND LIVE WITH THE OUTCOMES THEY CHOSE, not by being rewarded by the gov coming in and taking over their fucked up loans, and let them live there for a much lower price, therefore rewarding their ridiculous behavior.

 

[Vic]

Housing is a right....a natural resource....the right thing to do.....insert whatever excuse the left is going to use to justify this nonsense.

You do realize that 'this nonsense' is making people pay for their housing who would otherwise be able to live in it for free, right?

 

[Jhhnn]

you don't think the people who bought into these arms are responsible for their own downfall? living on credit instead of within one's means? you seem to want a nanny state, where there is no risk in anything, and with no risk, there is no prosperity and no life. so once again the people who fucked up don't have to deal w/ the consequences. PEOPLE NEED TO LEARN TO TAKE RESPONSIBILITY FOR THEIR ACTIONS AND LIVE WITH THE OUTCOMES THEY CHOSE, not by being rewarded by the gov coming in and taking over their fucked up loans, and let them live there for a much lower price, therefore rewarding their ridiculous behavior.

The problem, bob, is that it wasn't just homebuyers, but the lenders, too. following your logic, should we let them faceplant, bring on another 1931, or should we try something different?

As I've offered earlier, this isn't about the homeowners, at all- it's really about the banks and the investors, and about maintaining liquidity rather than accepting a debt deflation scenario... you know, the kind of situation where nobody invests, takes a risk, because their cash grows in value stuffed into their mattresses...

 

[CPA]

You do realize that 'this nonsense' is making people pay for their housing who would otherwise be able to live in it for free, right?

And why do we allow them to live in it for free?

 

[Vic]

And why do we allow them to live in it for free?

Text

 

[bob4432]

The problem, bob, is that it wasn't just homebuyers, but the lenders, too. following your logic, should we let them faceplant, bring on another 1931, or should we try something different?

As I've offered earlier, this isn't about the homeowners, at all- it's really about the banks and the investors, and about maintaining liquidity rather than accepting a debt deflation scenario... you know, the kind of situation where nobody invests, takes a risk, because their cash grows in value stuffed into their mattresses...

i agree it wasn't just homebuyers, but i feel they created a large portion of it. just because something is available doesn't mean it is good for you especially when we are talking about finances. i do think that the people who bought in more than they could afford and did stupid arm deals should be penalized for their ridiculous behavior. then add in all the 2nd, 3rd and 4th morgages and people just went full retard. i can say that 3rd and higher mortgages are on the banks, but a 2nd is still not a good thing for most people because they buy shit they don't need.

the end result is that anybody that did it "right" is going to get fucked and people who lived well beyond their means will not suffer the consequences of their actions.

and i believe many of the institutions should have been allowed to fail - they made bad decisions giving the ridiculous 125% mortgages - the ball doesn't always work in your favor, but they were bailed out because "they are too big to fail" and gave a lot to certain politicians, give me break. the banking herd needs to be culled just like some other herds...

and honestly, how far are we away from 1931 anyway? this trillion dollar here, trillion dollar there thought process of huge gov is ridiculous whoever's side you are on. i mean a ~17% true unemployment rate is not really anything to be proud of considering the shear amount of $$$ put into it to "stop" it.

average joe = getting it in the ass for the last 50yrs, w/out lube :twisted:

 

[gingermeggs]

Gotta love the whinging wingnuts. Fannie props up the value of real estate, which serves the bankers, investors, and a few homeowners, and they rip off on the old song and dance about intrusive govt, yadda, yadda, yadda...

It's often the same voices that were supporting the Bush admin while the fourth amendment went out the window in pursuit of the ebil Terrarists! and went along with the manipulation of the market that created this mess in the first place...

Not that they'd notice, "cranio-rectal infarctions" being what they are...

Ill translate that as meaning- "shit for brains"

 

[Jhhnn]

People who end up with Fannie as their landlord aren't getting away scott-free, at all. Fannie can still foreclose after the end of the agreed upon period, and likely will, sooner or later. I'd hope that Fannie charges the going rate for rent, as well, although that can't be said with any certainty.

The problem with letting banks fail is that we've allowed existing banks to become too large and too interdependent. Bailing out AIG is part and parcel of that, of the hidden relationships and dependencies created in the OTC derivatives market. It's a huge house of cards, a systemic failure, not just a failure of a few banking entities... If one of the main players can't pay, then none of them can, because they're all depending on each other to do so... counterparty risk was never part of the equation...

My biggest disappointment with the Obama Admin is that they haven't moved forcefully and effectively to prevent this stuff from happening again, and again...

Good article, here, from a guy who knows his stuff-

http://www.prospect.org/cs/articles?article=the_bubble_economy

 

[StageLeft]

Let's just have the govt prop up everything....homes, autos, finance, health insurance, whatevers next on the list....

This. It's being done for housing, cars, appliances, insulation among in fact many other things.

 

[LTC8K6]

Fannie $19B loss for the quarter

http://www.nypost.com/p/news/business/fannie_red_ink_LoLNmIJDRPh2Sd3wcuTUwJ

Freddie $5B loss for the quarter

http://finance.yahoo.com/news/Freddie-Mac-posts-5-billion-rb-3083454207.html?x=0&.v=3

 

[woodie1]

nm

 

[LTC8K6]

Fannie doesn't care if these poor folks won't make the payments. They are betting property values will increase and they can sell the properties later at a big profit. They are just creating this rental idea to gain ownership of the properties in a desperate attempt to make some money somehow, or be able to make their books look a little better. They don't care about the property owners at all, they are trying to rob them, in effect.

 

[rudder]

Are any of the options you presented worse than:

foreclosing --> evicting --> letting the empty houses over-saturate the market while producing no revenue

All good and well.... but if the people are being foreclosed on because they cannot pay their mortgage.... how do you expect them to pay rent?????

the cost to the taxpayer is not clear

That says it all.

 

[Robor]

Ill translate that as meaning- "shit for brains"

I believe it means, 'heads up their asses'.

 

[Robor]

Fannie doesn't care if these poor folks won't make the payments. They are betting property values will increase and they can sell the properties later at a big profit. They are just creating this rental idea to gain ownership of the properties in a desperate attempt to make some money somehow, or be able to make their books look a little better. They don't care about the property owners at all, they are trying to rob them, in effect.

Did you read any of Vic's replies?

 

[Modelworks]

Nobody has answered who will pay for repairs ? I hope it doesn't get referred to HUD standard repair methods, these homes will be worthless after the people rent them .

 

[werepossum]

Nobody has answered who will pay for repairs ? I hope it doesn't get referred to HUD standard repair methods, these homes will be worthless after the people rent them .

Government will pay for repairs. In glorious new Obamatopia government pays all, government owns all, government takes all.

You don't need many for this program, merely enough to guarantee some good sound bites. A few tearful families (better yet, single moms!) thanking Obama on camera is surely worth a few million.