One wonders how the Feds ever got involved in real estate in the first place. Elimination is a good idea, but merely the very beginning of all the Fed programs that never should have been imagined.
The GOP should have owned this issue five years ago.
Instead, the GOP has fiddle-farted around, making themselves look like clueless rubes in front of the banking community.
When I heard the news there was bi-partisan support to disband Fannie/Freddie, I thought to myself: 'that's good, but it is strange that all the central planners, leftists, progressives, so-called compassionate conservatives, etc... in Washington would give up the power and money involved in manipulating such a huge part of the US economy."
Now I see they have no intent to give it up at all.
And behind the scenes they will be crafting something much bigger and more expensive.
IF we are going to have federal involvement in mortgages. Far better to provide mortgage insurance instead of the loan. Better still would be a Federal insurance program that backs up the individual State’s insurance program, that in turn, backs up local private insurers.
Private insurers would pay a certain percentage into the state fund and would be the first line payer in the event of a mortgage failure. Payments by the state to the private mortgage insurer would be based on the % of mortgage failures and would only cover the amount of money actually lost - meaning limited to the difference between the sell price of the property in foreclosure and the cost of the loan, minus payments (note using payments here, not principle payments) already received.
The State program would then be an insurance pool (protected from general expenditure by the state) and it would in turn pay a percentage to the Feds for their protection. The state would not be in the direct mortgage insurance business but rather would pay some amount to the private insurers after a certain percentage of their customers defaulted on their loans. Moneys collected would be held in some highly liquid (say 30 day), low risk, low interest, commercial instrument (money markets??)
The last stop on this chain would be the Federal government which would pool and protect from general spending, the payments received from the states. Once a state’s insurance pool was depleted to a certain point, the Feds would start paying some percentage to the state’s insurance pool.
Key to this is that NO ONE, not the mortgage lender, not the insurance company and not the state would be protected 100%. No one is going to get all of their money back. The idea is to tide the company / state over until things turn around.
Franklin Raines, Jim Jones, and Jaime Gorelick (of the Clinton Era CIA/FBI information wall directive pre-9/11).......
All made multi-millionaires by these two quasi-government organizations. They should be arraigned, tried, convicted and executed for the trouble they caused us.
They don’t need GSE’s (gov’t sponsored enterprises) anymore b/c they succeeded in taking control of the Banks.
Or at least pushing their way into a spot at the table for control of the Banks (next to the NWO types: IMF, Rothschilds, etc).
Another boondoggle and or scam. Going to replace 2 agencies with 1 new one. Just get out of the mortgage business, period. Whatever the government touches turns to another huge disaster.