Free Republic

It doesn’t look like any GSE (housing finance) reform will be taken up in 2013. Partly because the leading contender, the Corker-Warner housing finance “reform” bill is so flawed. What does Corker-Warner do exactly? It shuts down two enormous mortgage insurance companies (Fannie Mae and Freddie Mac) and creates one gargantuan government insurance company (Federal Mortgage Insurance Corporation). Ah, nationalized mortgage insurance. This is particularly bizarre given that the FHA already exists as a national mortgage insurance agency for mortgages. Like single-payer healthcare systems (as in UK’s NHS), you take what the government decrees for you. But Obamacare is really...

There was a tremendous panel discussion today in the U.S. Senate hosted by the Federalist Society. The discussion concerned the proposed Corker-Warner bill to “reform” the housing finance system. The moderator was Troy Paredes and the speakers included Ronald Case, Bernard Weinstein and myself. Going forward, what should happen to the mortgage giants Fannie Mae and Freddie Mac? Weinstein argued that they should be kept in place, but regulated to avoid Congress from forcing them to take on too much risk. Case gave an eloquent discussion of the necessity for the rule of law in whatever happens going forward. What...

It appears that the Corker-Warner housing finance bill is still leading in the reform derby, despite its obvious problems and omissions (like protecting the property rights of current investors). Anyone remember the beating General Motors bond investors took in the government bailout of GM? Corker-Warner does little to fix any housing market problems that exist. And that is because housing legislation can’t cure what ails the economy: decreasing labor force participation and real median household income. Here is a chart of three economic indicators with clear downward momentum: civilian labor force participation (blue), the US homeownership rate (red) and real...

I fondly remember the days of Milton Friedman with his book and PBS series “Free to Choose.” That was in 1980 at the end of Carter-era and the beginning of the Reagan Revolution. Fast forward to 2013. We now have less freedom of choice, thanks to Congress and the Administration. Take for example healthcare insurance. Now, everyone must have healthcare insurance, even if you don’t want it. I went to healthcare.gov and saw that my choices were slim and my insurance premium rose to $1,366 per month. And no subsidy. Plus, I get to pay for sex change operations, Sandra...

As we all are painfully aware, the Affordable Care Act (aka, Obamacare) had a disastrous launch. Not to mention $940 million to CGI for a non-working website. Obamacare is so complex that it is likely unworkable … and unpopular once everyone gets a load of how their insurance premiums and deductibles have risen. obamacarecontractors Who in their right mind would design such a disaster? An overly complex mess that is unworkable. obamacare_chart_LGa The government, of course, and their cronies and apparatchiks. Like it or not, it is the insertion of government into the system that causes the problem. Just like...

Today, the US Senate held a hearing on “Housing Finance Reform: Powers and Structure of a Strong Regulator.” If I had been testifying, I would have thrown in a Medal of Freddom for Edward DeMarco, the acting Director of the Federal Housing Finance Agency (FHFA), the regulator for Fannie Mae and Freddie Mac. But alas, the panel that spoke today were largely regulators and/or attorneys. But the most interesting aspect of the hearing was what happened AFTER the hearing. Tim Pagliara, the CEO of CapWealth Advisors and longtime fundraiser/donor for US Sen. Bob Corker (of the infamous Corker-Warner housing reform...

The mortgage giants, Fannie Mae and Freddie Mac, have certainly had their share of problems and controversies. Both are in conservatorship with the Federal Housing Finance Agency (FHFA) after suffering devastating losses. This comes after Fannie Mae and Freddie Mac denying they have a government guarantee, but were bailed out by the Federal government after all. I never thought in a million years that Republicans, Democrats AND the Obama Administration would be on board with winding down the Democrat Darlings. But former Obama FHA Commissioner Dave Stevens summed it up nicely: “There is a bipartisan effort here that’s thoughtful and...