Venture capitalists would buy good mortgages that represented low risk & high reward.
But that would require getting the govt completely out of the system on all levels.
In alot of areas, people with low downs wouldn’t be able to buy houses right now because prices are still declining. That’s too bad, but it’s how markets work.
Investors with higher risk tolerance could buy up shakier paper. No problem by me.
As long as taxpayer money isn’t involved.
Fewer people would own homes. We’re discovering that isn’t such a terrible thing.
Buyer would have to learn to save up for a down payment to minimize risk to the investor.
We can’t have a free market & a recovery unless we get the frickin government completely out of the mortgage/housing business.
I disagree. Fewer buyers than sellers, both willing and unwilling, means prices continue to drop. Much of the growth in our past "healthy" economy came from real estate. While that may not seem like the most sound basis, it was the case. There is a simple answer to the problem of Freddie and Fannie; Break them up into numerous smaller parts. Then, each smaller company could be product specific, offering financing to the lowest risks all the way to high risk. In a scenario like this, there would be competition and no misrepresentation of what the product was when packaged and sold on the secondary. This would also make financing available to higher risk buyers, which isn't in itself a bad thing. Investors in a high risk mortgage would realize a much higher return in their investment.
In a perfect world, only excellent borrowers would be able to qualify for a loan. In the real world, that excludes too many potential borrowers. After this current Obama economy, people with great credit and strong incomes are becoming a small minority of the over all population.