I liked much of what was in the President's housing speech last week.
You can find it Here
Musings: To my knowledge, it is the first time the President has indicated their role within the Financial Crisis. These two organizations provide the liquidity for much of the lending that goes on in the U.S., while also setting loan origination standards for the private sector
This past Quarter was the first time Fannie has been profitable in a while. Preceding the financial Crisis of 2008, Fannie Mae had been a great source of funds for the federal government since the New Deal. I suggest reading James Hagerty's book "The Fateful History of Fannie Mae" if you would like more background.
In the Bloomberg article I have linked above, it mentions that the President was sparse on details. Without a doubt that is true, but before President Obama brought it into discussion, it is a topic that had been completely ignored by mainstream media. It is true that some Republican Congressman have discussed Fannie and Freddie before; and maybe the President sees this as an area of politics appease these congressman in hopes of a compromise on other issues. I will let somebody else dissect that Game of Thrones.
Finally though, the spotlight has been thrust onto Freddie and Fannie, they will not be ignored going forward! They were the mechanisms that worked with the derivative trading of bankers, mortgage brokers, home builders, Realtors and everybody else to hurt the economy.
There was no occupy Fannie Mae.
My opinion: I believe Megan McArdle (link above) asks some great questions as to how to fix the mortgage market, while keeping a 30 year fixed loan product. Fannie Mae and Freddie Mac provide means of financing that are unique to America and have brought the ability to buy homes to people who otherwise would have never been able to do it.
Before Fannie, mortgages were typically done in 10 year interest only payments with a Balloon payment at the end. I think Fannie Mae was an incredible evolution to that model and has been apart of the American success story to an impressive extent (I do not know enough to quantify that extent).
As I think is the case of many government programs, what is too much? When is too much? What are the safeguards?
I find it to be an interesting topic, I hope you do as well,
Stephen
In the Bloomberg article I have linked above, it mentions that the President was sparse on details. Without a doubt that is true, but before President Obama brought it into discussion, it is a topic that had been completely ignored by mainstream media. It is true that some Republican Congressman have discussed Fannie and Freddie before; and maybe the President sees this as an area of politics appease these congressman in hopes of a compromise on other issues. I will let somebody else dissect that Game of Thrones.
Finally though, the spotlight has been thrust onto Freddie and Fannie, they will not be ignored going forward! They were the mechanisms that worked with the derivative trading of bankers, mortgage brokers, home builders, Realtors and everybody else to hurt the economy.
There was no occupy Fannie Mae.
My opinion: I believe Megan McArdle (link above) asks some great questions as to how to fix the mortgage market, while keeping a 30 year fixed loan product. Fannie Mae and Freddie Mac provide means of financing that are unique to America and have brought the ability to buy homes to people who otherwise would have never been able to do it.
Before Fannie, mortgages were typically done in 10 year interest only payments with a Balloon payment at the end. I think Fannie Mae was an incredible evolution to that model and has been apart of the American success story to an impressive extent (I do not know enough to quantify that extent).
As I think is the case of many government programs, what is too much? When is too much? What are the safeguards?
I find it to be an interesting topic, I hope you do as well,
Stephen
