Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

U.S. Backs Off Tight Mortgage Rules
WSJOnline ^ | 5/13/2014 | Nick Timiraos and

Posted on 05/14/2014 6:02:50 AM PDT by mac_truck

WASHINGTON—The Obama administration and federal regulators are reversing course on some of the biggest postcrisis efforts to tighten mortgage-lending standards amid concern they could snuff out the fledgling housing rebound and dent the economic recovery.

On Tuesday, Mel Watt, the newly installed overseer of Fannie Mae and Freddie Mac, said the mortgage giants should direct their focus toward making more credit available to homeowners, a U-turn from previous directives to pull back from the mortgage market.

In coming weeks, six agencies, including Mr. Watt's, are expected to finalize new rules for mortgages that are packaged into securities by private investors. Those rules largely abandon earlier proposals requiring larger down payments on mortgages in certain types of mortgage-backed securities.

The steps mark a sharp shift from just a few years ago, when Washington, scarred by the 2008 crisis, pushed to restrict the flow of easy money that fueled the housing bubble and its subsequent bust. Critics of the move to loosen the reins now, including some economists and lenders, worry that regulators could be opening the way for another boom and bust.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Extended News; News/Current Events
KEYWORDS: crisis; mortages; mortgage; mortgagerules; mortgages; paywallcrap; redux
Navigation: use the links below to view more comments.
first 1-2021-4041-43 next last

1 posted on 05/14/2014 6:02:50 AM PDT by mac_truck
[ Post Reply | Private Reply | View Replies]

To: mac_truck

Because one subprime mortgage collapse is never enough.


2 posted on 05/14/2014 6:03:43 AM PDT by E. Pluribus Unum ("The more numerous the laws, the more corrupt the government." --Tacitus)
[ Post Reply | Private Reply | To 1 | View Replies]

To: E. Pluribus Unum

LOL. Here we go again.


3 posted on 05/14/2014 6:05:37 AM PDT by Alberta's Child ("What in the wide, wide world of sports is goin' on here?")
[ Post Reply | Private Reply | To 2 | View Replies]

To: mac_truck

Isn’t this the crap that got us in this mess in the first place? Thanks DemocRATS! Once is never enough! Right?


4 posted on 05/14/2014 6:09:19 AM PDT by FlingWingFlyer (Obama's smidgens are coming home to roost.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: mac_truck
fledgling housing rebound

Spin, spin, spin, spin, spin. Spin until you are dizzy and sick. There is no "housing rebound." The entire economy never left the toilet due to Obama loading taxes and regulations onto it, and the suffocating debt that he and Bush loaded onto it.

5 posted on 05/14/2014 6:09:25 AM PDT by Opinionated Blowhard ("When the people find they can vote themselves money, that will herald the end of the republic.")
[ Post Reply | Private Reply | To 1 | View Replies]

To: Alberta's Child

Yeah, I makes 2.5 million a years and eyes wants ta live in one of dem big Trump hy risus on Park Ave. Sur I kun eford dit. You don’t giv me dis stinkin loan and youse a racist


6 posted on 05/14/2014 6:10:25 AM PDT by shadeaud (Be strong when you are weak.)
[ Post Reply | Private Reply | To 3 | View Replies]

To: mac_truck

There is no solution to our international financial crisis. Any real solutions will involve austerity (like thes mortgage restrictions). But they are met with anger from the people, as in Greece and Spain. So they back off.

This leaves the only voluntary solution to be monetizing any debt. i.e. inflation which, due to the size of the problem, will slide into hyper-inflation.

Everything is already getting more expensive, but it will get progressively worse. Imagine where we would be if the fracking boom had not happened.


7 posted on 05/14/2014 6:12:55 AM PDT by cuban leaf
[ Post Reply | Private Reply | To 1 | View Replies]

To: Opinionated Blowhard

Spin, spin, spin, spin, spin. Spin until you are dizzy and sick. There is no “housing rebound.”


True, but the REAL problem is that these restrictions WOULD make it much worse. Sadly, this is the only voluntary solution we have that does not lead to hyperinflation (monetizing everyones debt). And nobody will accept it, so hyperinflation here we come.


8 posted on 05/14/2014 6:14:45 AM PDT by cuban leaf
[ Post Reply | Private Reply | To 5 | View Replies]

To: mac_truck

“The only useful banking innovation was the invention of the ATM.” - former Fed Chairman Paul Volcker (1979-1987)

Only Fed Chairman I admire and agree with. I stand with him and Milton Friedman on the issue of financial markets.


9 posted on 05/14/2014 6:18:30 AM PDT by Corporate Democrat
[ Post Reply | Private Reply | To 1 | View Replies]

To: Corporate Democrat

I would put ‘direct deposit’ right up there with the ATM in greatest inventions in banking.


10 posted on 05/14/2014 6:22:01 AM PDT by Beagle8U (Unions are an Affirmative Action program for Slackers! .)
[ Post Reply | Private Reply | To 9 | View Replies]

To: E. Pluribus Unum
Because one subprime mortgage collapse is never enough.

True, but I think they over-corrected on this one.
11 posted on 05/14/2014 6:22:32 AM PDT by mmichaels1970
[ Post Reply | Private Reply | To 2 | View Replies]

To: mac_truck

Lather. Rinse. Repeat.


12 posted on 05/14/2014 6:22:56 AM PDT by dfwgator
[ Post Reply | Private Reply | To 1 | View Replies]

To: Beagle8U
I would put ‘direct deposit’ right up there with the ATM in greatest inventions in banking.

Online account access. Never balance a checkbook again.
13 posted on 05/14/2014 6:23:43 AM PDT by mmichaels1970
[ Post Reply | Private Reply | To 10 | View Replies]

To: FlingWingFlyer

“Isn’t this the crap that got us in this mess in the first place?”

NO.
I do this for a living. Most of my day is spent asking my customers for what seems like useless information to over document a loan file.
Anyone who has gotten a mortgage recently will have found the process to be unpleasant in many cases.

The changes from what I have read actually make sense. Hard for me to admit that something done under this administration would actually make sense; so will have to see.


14 posted on 05/14/2014 6:29:37 AM PDT by HereInTheHeartland (Obama lied; our healthcare died.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: HereInTheHeartland
I do this for a living. Most of my day is spent asking my customers for what seems like useless information to over document a loan file.

I have a few friends in the same business and their stories are the same as yours.
15 posted on 05/14/2014 6:33:02 AM PDT by mmichaels1970
[ Post Reply | Private Reply | To 14 | View Replies]

To: mmichaels1970

I haven’t ‘balanced’ a checkbook in 25 years.

I use a ‘no fees’ prime rate VISA for most everything and pay the balance every month.


16 posted on 05/14/2014 6:33:08 AM PDT by Beagle8U (Unions are an Affirmative Action program for Slackers! .)
[ Post Reply | Private Reply | To 13 | View Replies]

To: mac_truck

Stupidity is doing the same thing over and over and expecting a different result.

We’ve been down this road at least twice so far.

Wait, let me guess... the Democrats are saying, “Yes, but this time it will be different.”

Maybe some of the lower income people who had their lives wrecked by this foolishness in the past can testify as to the madness of this.


17 posted on 05/14/2014 6:33:19 AM PDT by upchuck (Support ABLE, the Anybody But Lindsey Effort. Yes, we are the ABLE!!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: E. Pluribus Unum

You are righter than you know. As a 30 year veteran of the mortgage industry both underwriting and as a mortgage broker I can tell you that these cycles are never ending. When rates go up and business slows down the first thing that happens is they come around and tell the underwriters to loosen up. Then the no doc loans come back and the 97% and 100% loan programs. As 30 year rates rise the ARM’s get hot again. Less than perfect credit programs come back.

The one and only thing to remember is that lenders are in business to lend money. If they can’t lend money they go broke.


18 posted on 05/14/2014 6:36:14 AM PDT by Georgia Girl 2 (The only purpose o f a pistol is to fight your way back to the rifle you should never have dropped.)
[ Post Reply | Private Reply | To 2 | View Replies]

Comment #19 Removed by Moderator

To: mac_truck
In coming weeks, six agencies, including Mr. Watt's, are expected to finalize new rules for mortgages that are packaged into securities by private investors. Those rules largely abandon earlier proposals requiring larger down payments on mortgages in certain types of mortgage-backed securities.

Cat's out of the bag as far as the quality of mortgage-backed securities based more upon social engineering goals than sound investment criteria, Mr. Watt. Therefore, this will not work with private investors, who have already been burned. It will merely create more bad paper, and guess who ultimately buys it.

For those who are able to do so, at least this ill-advised new bout of easy money should provide an opportunity to get out from under a mortgage in an area or type of residence that no longer works for you. Sell, get to a lower cost of living area. If you're in an expensive market take your equity and buy a small house with productive acreage in a cheap market free and clear.

They need to keep the merry-go-round spinning and I understand why, but I don't recommend being on it. Here's your chance to get off, if you're so inclined.

20 posted on 05/14/2014 6:37:33 AM PDT by RegulatorCountry
[ Post Reply | Private Reply | To 1 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-4041-43 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson