Posted on 06/21/2024 10:07:26 AM PDT by SeekAndFind
Preemptive Bailout.
NO!!!!!
Net new government insured credit added to the economy also adds to inflation.
Then they blame everybody else for inflation.
It's like we learned nothing from 2008.
They want people to over leverage their own homes to buy more stuff?
There’s no upside for the average homeowner. This will only prompt lenders to make second mortgages easier to get causing people to be very upside down in the equity position causing more foreclosures.
And as we know Freddie and Fannie do not protect the homeowners. Only the banks.
If you have a lot of equity in your home and a good credit rating banks will happily give you a second mortgage. If you default the bank will not lose money as they will then foreclose on the house and no taxpayer money will be lost.
The only reason the government wants to enter this market is to give loans that are not financially sound. If they default you can bet your ass the taxpayer will pick up the bill.
Mortgages are profitable for investors. Problem is the govt insures them so profits are private and defaults are public. If the public is going to insure them, some profits should be returned. Monthly mortgage bills should have a subtraction off the principal similar to the lottery credit on your tax bill.
Even “good” second mortgages carry a lot of risk.
The reason for this is that most failures to keep up payments on second mortgages happen when the economy is in recession and people are losing their jobs.
That in turn affects the value of the original collateral.
The foreclosure would then be done by the first mortgage holder.
The second mortgage holder will be fortunate to get scraps at that point.
this is needed about as much as teats on a boar
You will own nothing and you will be happy ( or else....!)
I tend to think mortgages should be local.
California real estate prices can and do swell up because of out-of-state funding.
The federal mortgage entities have lots of low interest rate mortgages on their books and probably would like to cover the resulting losses with high interest rate second mortgages.
In the early 1980s, S&Ls tried to cover lower interest rate losses by risky new financing. I read the end result was $500 billion (circa 1990) in federal bailouts.
I’m going to take out a second mortgage just so I can get a Brandon/Ho Administration loan forgiveness letter.
“My job is a corporate recruiter so I pretty much live the employment experience every day. When I read about the ‘job numbers’ I am incensed. Anyone that spends 10 minutes on LinkedIn and reads the feed can see the absolute desperation of white collar workers. Daily and numerous posts of people who are literally at the end…about to go bankrupt, about to lose their home and marriages. People who have been out of a job a year+, unemployment run out and savings gone…people who 2 years ago would have had many job offers, people who are in the professional class and find themselves completely despondent.”
via:
https://theconservativetreehouse.com/
Like S&Ls after Carter, Fannie Mae and Freddie Mac have below their borrowing rate loans on their books.
Properly done (i.e. total mortgages less than 80% of tax assessment value), the second mortgage expansion would be better than eliminating the federal mortgage interest deduction for mortgages under 5% and using the tax revenue gained to shore up Fannie Mae and Freddie Mac.
Nationalization of property
That’s the ultimate goal, total government ownership of all real estate, and dictating where you can live.
What could go wrong? Plenty. Delete the govt and start over.
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