Ginnie Mae Heading to $1 Trillion in Government Backed Mortgage Debt by 2010

Economic Policy Journal ^ | 7/22/09 | Robert Wenzel

[FromLori]

So you thought the financial crisis ended the mad leveraged mortgages. Think again.

Mortgage bonds guaranteed by U.S. agency Ginnie Mae will probably swell to $1 trillion by the end of 2010 because borrowers with low down payments or bad credit scores can only qualify for government-insured loans, Bank of America Corp. analysts are saying.

The Federal Housing Administration, which insures loans with down payments as low as 3.5 percent and has no credit-score requirements, is “the only source of funding for these leveraged borrowers,” according to Ankur Mehta and Ohmsatya Ravi, who wrote the report, say.

Loans backed climbed to $680 billion as of June 30 from $360 billion two years earlier. Ginnie Mae continues to back the mortgages in the same format as the old days. Lenders package the mortgages into bonds backed by Ginnie Mae.

[ProtectOurFreedom]

My God, subprime loans doubled in two years at Ginnie Mae, and they are going up by 50% AGAIN? There will be no end to the financial mess until government stops subsidizing people who should NOT be purchasing a home.

[FromLori]

The way I see it we are pretty much toast because by the time that could happen it will be too late.

http://market-ticker.org/archives/1250-Commercial-RE-Tick...-tick...-BOOM!.html

[rockinqsranch]

Time goes by, and some folks need a reminder. Following is relative to the subject, so I repost for those whom either don’t know, or have foggy memories of what happened:

Assault On The Mortgage Industry
National Review, Dec 27, 1993 by Robert Stowe England:

http://findarticles.com/p/articles/mi_m1282/is_n25_v45/ai_14779796

[allmost]

Can’t argue with that.

[Sgt_Schultze]

Fannie Mae has announced it will resume 125% loan to value mortgages on August 1. In a falling RE market, there's not telling how wide the LTV will eventually become.

Let the good times roll.