Mortgage Reform

[piasabird]

http://www.bloomberg.com/news/2013-...oduce-bill-to-end-fannie-mae-freddie-mac.html

These guys are really serious about reforming the mortgage system and replacing Fannie Mae and Freddie Mac with a new mortgage system with no Government Guarantees. I was reading some of the bill and it is a framework to creat new Mortgage companies with a centeral agency or a new federal Department to oversea the new Martgage companies.

In other words, this will create a new Federal Department like the FCC with a bunch of overpaid beaurocrats to bleed the taxpayers dry. This does not mean it will actually solve any problems. It just looks like more red tape and regulation to even further complicate the real estate finance system. We fill enough forms out now just to buy a house. Now when we close on a house we will probably have to pay a big federal government tax as well.

I cant see any good coming from this.

Fannie Mae and Freddie MAC have almost paid back the $100 Bil bailout they got from the federal government. This means they are solvent and making money and resulting in a surplus. So why fix something that is not broken? I am not saying it is perfect or anything. Cant they just tweak it a little bit? Why kill the golden goose?

 

[drebo]

I think holding people (including banks and corporations) to the contracts they enter would fix the problem all on its own.

Also, get rid of government "incentives" for sub-prime lending. Home ownership isn't a right.

 

[Exterous]

I think its a bit early to try and see where these calls to end Freddie and Fannie will end up. Still a lot of posturing and negotiating by both sides. I would imagine the stock holders are going to get involved as well as they stand to lose a lot of money depending on how this plays out

 

[DCal430]

http://www.bloomberg.com/news/2013-...oduce-bill-to-end-fannie-mae-freddie-mac.html

These guys are really serious about reforming the mortgage system and replacing Fannie Mae and Freddie Mac with a new mortgage system with no Government Guarantees. I was reading some of the bill and it is a framework to creat new Mortgage companies with a centeral agency or a new federal Department to oversea the new Martgage companies.

In other words, this will create a new Federal Department like the FCC with a bunch of overpaid beaurocrats to bleed the taxpayers dry. This does not mean it will actually solve any problems. It just looks like more red tape and regulation to even further complicate the real estate finance system. We fill enough forms out now just to buy a house. Now when we close on a house we will probably have to pay a big federal government tax as well.

I cant see any good coming from this.

Fannie Mae and Freddie MAC have almost paid back the $100 Bil bailout they got from the federal government. This means they are solvent and making money and resulting in a surplus. So why fix something that is not broken? I am not saying it is perfect or anything. Cant they just tweak it a little bit? Why kill the golden goose?

Because when sold FNMA and FHLMC still owe the government 190 billion.. The Feds expect to see an additional 190 billion after selling off its assets.

 

[Attic]

They paid back that 100Billion bailout, adding to recent monthly budget surpluses for .gov, because Benny Bucks have been buying all their assets (some clearly toxic) at full value. Of the 85 billion of money printing the fed engages in every month, some 40billion goes to mortgage backed securities every month.

The loans were repaid with printed money, same thing happening with treasuries.

Beyond that and regarding the mortgage business, too much money to be stolen there by crafty financial firms. Whatever the end result of any reform would be, given the current paradigm of political and financial power that rules the land, that reform is going to help those who stand to make the most money from it and retain control from enforcing it. The little guy will get squeezed because his insides are what fuel the political and financial elite's right to moar stuff and control.

 

[Texashiker]

Also, get rid of government "incentives" for sub-prime lending. Home ownership isn't a right.

The right to own a home is a basic human right, which does not have to be affirmed by law.

 

[rudder]

The right to own a home is a basic human right, which does not have to be affirmed by law.

Homes are not free. you have a right to own a house if you can afford it. You do not have a right to use mortgage trickery to get yourself in a $300,000 house when you can only afford a $800 month mortgage.

 

[Double Trouble]

The right to own a home is a basic human right, which does not have to be affirmed by law.

No, the there is no basic human 'right' to OWN a home. If you can afford to own a home, you purchase one. If you can't, then you can rent one or possibly be provided housing accommodations if you are unable to provide for yourself.

 

[Texashiker]

Homes are not free. you have a right to own a house if you can afford it. You do not have a right to use mortgage trickery to get yourself in a $300,000 house when you can only afford a $800 month mortgage.

A fool and his money are soon parted.

Which one is the fool, the bank for lending to someone who can not afford to pay back the loan, or someone buying something they can not afford.

The problem is, banks are not held responsible for their poor decisions.

If you can afford to own a home, you purchase one.

That is my point.

 

[Nintendesert]

No, the there is no basic human 'right' to OWN a home. If you can afford to own a home, you purchase one. If you can't, then you can rent one or possibly be provided housing accommodations if you are unable to provide for yourself.

The banks chose to lend the money. So maybe they should be held to some degree of responsibility in the matter too. It's really curious how so many just give banks a pass on making these poor loans and are all for bailing them out but fucking over their fellow common American. :hmm:

 

[rudder]

A fool and his money are soon parted.

Which one is the fool, the bank for lending to someone who can not afford to pay back the loan, or someone buying something they can not afford.

The problem is, banks are not held responsible for their poor decisions.

That is my point.

In the past if banks wanted any type of federal regulatory approval... they had to be nice with the CRA and make the feds happy. With fannie and freddie buying 40% of all subprimes by 2008... the banks could get sloppy with their underwriting. this inflated home values way beyond where a free market would have taken them.... and the rest is history.

My point is the government had the attitude that home ownership was a right... and it led to the destruction of the economy. government, people, and banks were all in the trifecta of wrong.

 

[rudder]

The banks chose to lend the money. So maybe they should be held to some degree of responsibility in the matter too. It's really curious how so many just give banks a pass on making these poor loans and are all for bailing them out but fucking over their fellow common American. :hmm:

The banks were coerced by the feds to make these loans. There are many studies that conclude that clintons Community Reinvestment Act actions caused the housing crisis.

If you ran a bank and for example wanted a merger... Imagine in 2006 that you had no subprime approvals on the books. banks had to comply with the feds directives... and fannie mae and freddie mac assisted by buying subprime loans.

clinton added teeth to the community reinvestment act and bush looked the other way as it propelled the economy. The banks were basically bullied.

 

[LegendKiller]

The banks were coerced by the feds to make these loans. There are many studies that conclude that clintons Community Reinvestment Act actions caused the housing crisis.

If you ran a bank and for example wanted a merger... Imagine in 2006 that you had no subprime approvals on the books. banks had to comply with the feds directives... and fannie mae and freddie mac assisted by buying subprime loans.

clinton added teeth to the community reinvestment act and bush looked the other way as it propelled the economy. The banks were basically bullied.

This is fucking hilarious...


http://www.publicintegrity.org/2009/subprime-25


Now, please review each one and tell me which ones were CRA regulated. It wasn't Countrywide, nor Ameriquest nor Newcentury, not First Franklin or Option one.

CRA was such a small part of the mortgage universe and wasn't even close to being as bad as the NINJA loans. It's ridiculous you people keep this up.

Furthermore, they only bought that much for a very small period as they lost tons of prime business to the mortgage brokers. They were nothing compared to the volume out in the market.

Finally, the biggest problem was the equity tranches. Had the banks been regulated properly, eliminating SIVs and proper treatment of CDOs, and reduction of leverage, there wouldn't have been a problem.

 

[Texashiker]

My point is the government had the attitude that home ownership was a right... and it led to the destruction of the economy. government, people, and banks were all in the trifecta of wrong.

Home ownership is a basic human right, but that does not mean it is free.

Gun ownership is a right, but I still have to buy the gun.

Voting is a right, but I still have to find a way to the voting polls.

Religion is a right, but I still have to drive to church.

Freedom of the press is a right, but I still have to buy the newspaper.

 

[drebo]

Home ownership is a basic human right, but that does not mean it is free.

Homeownership is not a basic human right. Shelter is a basic human right. You do not need to own your dwelling to find shelter in it.

There is a very large difference...one which you moderates and liberals (and most conservatives) aren't capable of seeing or refuse to acknowledge.

 

[Texashiker]

Homeownership is not a basic human right. Shelter is a basic human right. You do not need to own your dwelling to find shelter in it.

If home ownership is not a right, then freedom is not a right.

It is on your own land that someone is truly free.

Shelter is subjective to restrictions by the property owner.

 

[Matt1970]

Home ownership is a basic human right, but that does not mean it is free.

Gun ownership is a right, but I still have to buy the gun.

Voting is a right, but I still have to find a way to the voting polls.

Religion is a right, but I still have to drive to church.

Freedom of the press is a right, but I still have to buy the newspaper.

I don't think you understand what a right is.

If home ownership is not a right, then freedom is not a right.

Freedom is guaranteed by your government. That is a right.
Homeownership is not guaranteed by your government.

Keeping your gun is guaranteed by your government. That is a right.
Obtaining a gun is not guaranteed by your government.

Walking to a voting poll is free.

Freedom of the press is a right. If a news organization decides to charge you to deliver that news to you, then that has nothing to do with your rights. If you want a country to guarantee you a newspaper every day don't be shocked by what news you get.

Freedom

 

[Texashiker]

I don't think you understand what a right is.

Rather than present your own evidence you post insults.

 

[drebo]

If home ownership is not a right, then freedom is not a right.

It is on your own land that someone is truly free.

Shelter is subjective to restrictions by the property owner.

You're confusing inherent human rights with government granted "rights."

Inherent human rights include the right to not be subjugated arbitrarily, the right to life, the right to pursue one's own outcome (including shelter,) etc.

The concept of "ownership" is something granted by society and cannot, by definition, be a basic human right. In order for you to own something, there must be a contract (whether explicit or implied) between you and those around you. Simply asserting that "this rock is mine" makes no difference when those around you can't understand your words because spoken language hasn't been invented yet. The only thing that matters is that those around you respect your right to that rock and don't try to take it from you.

Consider one of the major reasons America was founded and the basis behind the "American Dream." In a monarchy, all land and property is owned by the monarchy and your use of it is dictated by them. America was founded as the "Land of Opportunity," not the "Land of Equal Outcome." The American Dream is the chance to own a piece of land, not the ownership of the land itself. And even if it were, the American Dream is not the American Right.

Government granted "rights" (this term is actually backwards...it should be "things we refuse to let the government make laws against)" concern themselves with specific things. For instance, the "right" to not be searched by someone else without cause. Some of the "rights" that Americans have been granted do overlap with basic human rights: the first amendment, for instance, and parts of the 14th...but that does not mean that all government granted rights are basic human rights. Government typically passes laws to protect basic human rights (murder, discrimination, speech, etc.) but that does not mean that all rights governments protect are basic human rights.

The social contract is what allows us to respect the right to ownership and what dictates property rights. Because of this, ownership of anything cannot be a basic human right.

Additionally, on another note entirely concerning your other ravings in the quoted post, owning your own property does not give you the right to infringe on other peoples' basic human rights (or societal rights, for that matter.) You cannot kill someone in cold blood simply because you are on your own property. In that manner, you are still not "completely free" even despite owning your own property.

 

[LegendKiller]

If home ownership is not a right, then freedom is not a right.

It is on your own land that someone is truly free.

Shelter is subjective to restrictions by the property owner.

Home ownership is not a right, it is a privilege for those who strive to obtain it. When do you stop just declaring things as a right? What's next, is a car a right? What about cable TV?

Just how socialist/communist do you want to go?

 

[drebo]

Rather than present your own evidence you post insults.

You've posted no "evidence," either. Only bleeding-heart rhetoric.

Frankly, I'm kind of surprised. I shouldn't be, though...the definition of "Republican" is more or less "ultra-socially conservative authoritarian" now.

 

[Via]

Both sides are correct.

There are no laws preventing home ownership, and in my eyes that makes it a "right". But anyone wishing to own a home obviously must pay for it.

 

[Texashiker]

Home ownership is not a right, it is a privilege for those who strive to obtain it. When do you stop just declaring things as a right? What's next, is a car a right? What about cable TV?

Just how socialist/communist do you want to go?

Do you know your history? There was once a time when land ownership was reserved for royalty.

You can not have it both ways.

Either everyone is entitled to own land and a home, or only a select few are.

From your post you seem to think that rights and free go hand-in-hand, which is not the case.

Home ownership is reserved for those who can afford it.

But once someone can afford to buy a home, then they have a right to buy said home.

 

[Matt1970]

Rather than present your own evidence you post insults.

I don't think you understand what an insult is.

 

[mshan]

"Do you know your history? There was once a time when land ownership was reserved for royalty."

At least for a historical perspective of U. S. markets, watch "The Flaw" on Netflix: http://www.bestonnetflix.com/title/the-flaw/t/70166261 (whole thing is worth watching, but history of mortgages in U. S. starts around the 43 minutes mark)

It does unfortunately have a bit of an overlaid political idealogy / message (http://www.economist.com/blogs/buttonwood/2011/06/inequality-and-financial-crisis), but if you can ignore that, it does lay out about a century of housing and mortgages in U. S.

Everyone likes to rip on subprime as "the" culprit of whole financial meltdown, but that documentary says that in mid-1990s it was predatory lenders who swooped into minority neighborhoods and pushed serial refis onto homeowners with lots of equity in their homes and stripped that all away (53:50 mark of Netflix video linked above)

Plus Ground Zero for the housing crash in 2000's was centered on California (I don't believe Orange County, California is your stereotypical subprime mortgage market), Arizona (Phoenix), Nevada (Las Vegas), and Florida. I think 4 western states accounted for something like 50% of U. S. housing markets.

Former Wells Fargo CEO also reinterated again on tv that it was just 10 investments banks and 10 Savings and Loans institutions that were responsible for crash.

And as Larry Kudlow used to crow, subprime is only 15% of GDP and could cause a mild recession, at worst.

So, obviously, the root cause was something else...


IIRC, this YouTube summary of housing cycles also states that there should have been a housing correction in 2002, but Bubbles Greenspan subverted it: http://www.youtube.com/watch?v=Cus4opgTJb0 (start around 3:40 mark)