Preemptive Bailout.
NO!!!!!
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.
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.
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.
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
What could go wrong? Plenty. Delete the govt and start over.
“to purchase and guarantee second mortgages”
I remember seeing a price of 41 cents a share. My memory may be wrong.
Therefore, I doubt these companies are in a position to truly guarantee anything.
If a federal guarantee is to be issued, it probably should be backed by a contemporarily authorized new federal income tax on government employee pension income.
Posturing for another payoff.
Assuredly.
Perhaps it is as simple as homes for the homeless.
Just a legal means to take control of private property.
They are deliberately preparing another housing bubble. And when it hits propose all manner of repressive legislation to solve the crisis.
What’s next? Nationalizing ATM cards (with overdraft protection)?