Wednesday, December 10, 2014

Fannie and Freddie will always be here and have always been shareholder owned during conservatorship

  • Fannie and Freddie are now doing 3% down loans.
  • Fannie and Freddie are competing with FHA loans, but are doing it cheaper, with less upfront money for same loan. Also FHA loans add to your loan amount right off. 100k loan is 102k at FHA. At Fannie its 100k.
  • Fannie and Freddie can only think of this 3% down stuff. FHFA regulates them and tells them they have to do it, and they do have to do it, as part of law.
  • Banks would never take such a low down payment, Nor would they risk the costs associated with foreclosure on such a low down payment. 
  • Banks DO NOT have to give 3% down loans if Fannie or Freddie were eliminated. They are not Regulated by FHFA and CAN NOT be forced to give such loans. They are Free companies and they would never offer such terms. 
  • Since banks would never offer such terms and it seems it would be the only way to get housing moving, the FHFA told fannie and freddie to do it. 
  • At 20% down the USA real estate market is D.O.A.
  • At 10% down the USA real estate market is D.O.A.
  • At 5% down the USA real estate market is D.O.A.
  • At 3% down the USA real estate market may grow? The above is why the FHFA has enacted 3%
  • By shutting down Fannie and Freddie you turn the mortgage market and real estate into D.O.A.
  • Fannie and Freddie are here to stay. You can bank on it. You can bet 95% surety that by the next election F&F will be free and the mortgage market will No longer be in the FHFA hands. 
  • Government is not meant to run companies, Government certainly is not meant to TAKE 100% from private shareholders. Would shareholders of Apple or Ford or JP Morgan or Goldman Sachs like the terms of F&F? NO! Then why would the government think anyone would deal with them on a new housing structure when its obvious the government will take all YOUR capital at its whim.  

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