Another Obama Head Fake On Fannie, Freddie Reform Read More At Investor's Business Daily

IBD ^ | 08/07/2013

[SeekAndFind]

Big Government: President Obama is renewing calls to reform Fannie Mae and Freddie Mac. But it's just another ruse to prevent these costly government failures from being privatized.

While outlining his plan Tuesday in a housing speech in Phoenix, Obama proved he's the master of talking out of both sides of his mouth.

In one breath, he encouraged the private market to take a bigger role in home lending, and even suggested the government's role should be limited.

Yet in the next, he argued the government still plays a vital role in the mortgage market by guaranteeing "affordable housing" for lower-income Americans.

Then he talked about how he wants to "strengthen" the Federal Housing Administration, by which he means expand its role in the affordable housing market. FHA has already picked up the subprime slack from Fannie and Freddie on his watch.

Now Obama seeks to further expose it to risky subprime loans by qualifying deadbeat borrowers with foreclosures and bankruptcies. Obama also prattled on about personal "responsibility," and making sure those who want a home can actually afford one.

Yet instead of making deadbeat borrowers wait three years to apply for another home loan, Obama is ordering FHA to back such high-risk loans right now, as long as the borrowers have a job and take credit counseling.

He also linked housing reform to immigration reform, arguing that immigration can stimulate the housing market. But in the run-up to the crisis, thanks to government pressure on Fannie and Freddie, millions of Hispanic immigrants — many here illegally — took out home loans with no down payments and weak or no established credit, and defaulted on those loans in droves.

[Pearls Before Swine]

Thanks for posting.

I would have found out the details sooner or later, and here they are.

When I heard the first sketchy reporting about his plan to wind down Fannie and Freddie, I wondered when the proverbial other shoe would drop. This editorial succinctly provides the details:

- Winding down Fannie and Freddie is useless if you crank up the FHA’s ability to lend irresponsibly
- A public-private lending partnership with the government on the the hook for the deep losses—sounds like Countrywide, doesn’t it?
- Emphasis on credit box expansion — you’ve defaulted, but if you get credit counseling, you can take out a mortgage immediately?

And so on. What I’m waiting to hear from him is something really Communistic like, “If you serve the government, we’ll provide you with a house.”

[Baseballguy]

Just think when Private bus has to provide the loans on guarantee backed by the Gov you have high yields on 30 mortgages. This is soo opposite to normal private market it might actually work.

This is my speculation. Bank get loan for .25 % charges 4.5% for 30 years. To me that looks great.

[Lorianne]

Another attempt to re-inflate the housing bubble.

NAHB, NAR and MBA have powerful lobbyists working tirelessly in D.C. They will not rest until we have another housing bubble

[Lorianne]

Another attempt to re-inflate the housing bubble.

NAHB, NAR and MBA have powerful lobbyists working tirelessly in D.C. They will not rest until we have another housing bubble

[whitedog57]

They won’t so anything. Both F&F are hiring!

http://confoundedinterest.wordpress.com/2013/08/06/obamas-old-deal-housing-speech-save-the-30-year-mortgage-as-7-out-8-jobs-created-are-part-time/

[traditional1]

Coming soon to YOUR neighborhood: inner-city tribal parasites, with Mortgages that YOU will pay through taxes. Additionally, EVERY decent community will have to allow Section 8 housing (to allow more "Diversity").

Also coming to YOUR neighborhood will be the associated gangsta's, robberies, rapes, assaults, and murders that are part of their Culture......you'll hear boomboxes with Hip-Hop and Rap music at ALL hours, and you'll be accused of Racism if you voice your concerns for your children, wives, daughters, etc. safety.