As for taxpayers backing these government sponsored enterprises I ran across the following recently in a column on the subject.
* United States Code
o TITLE 12 - BANKS AND BANKING
+ CHAPTER 46 - GOVERNMENT SPONSORED ENTERPRISES
U.S. Code as of: 01/06/03 Section 4503. Protection of taxpayers against liability
This chapter may not be construed as obligating the Federal Government, either directly or indirectly, to provide any funds to the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, or the Federal Home Loan Banks, or to honor, reimburse, or otherwise guarantee any obligation or liability of the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, or the Federal Home Loan Banks. This chapter may not be construed as implying that any such enterprise or Bank, or any obligations or securities of such an enterprise or Bank, are backed by the full faith and credit of the United States.
[End]
I believe Mr. Greenspan has tesified before Congress expressing worry about Fannie Mae, et al. should it be widely known that investors' money is NOT backed by the U.S.
Well another pesky little trick is needed to keep the real estate bears from being right. The last little trick, interest-only loans, is starting to worry some. To wit,
"Another large underwriter, Mortgage Guaranty Insurance Corp., known as MGIC, confirmed that it, too, is monitoring real estate speculation in hot housing markets and has serious concerns about certain interest-only mortgages that investors are using to buy multiple houses or condos.
The companies were responding to a study that found that nearly 25 percent of homes bought in the United States last year was for investment, not for owner occupancy. Thirteen percent of purchases were vacation homes, according to the National Association of Realtors."
In 2001 only about two percent of the mortgages were interest only, I believe.
A recent Dr. Thomas Sowell post stated that today on average about 25 percent of mortgages nationwide are interest only. In the San Francisco area it's almost two-thirds if I remember correctly. In the Washington, D.C. area it's over 50 percent.
Time for the real estate bulls to roll out another little trick, giving mortgages to the 10? 15? 20? million ILLEGAL aliens.