I realize that we are all concerned about the U.S.
Remember one of the biggest factors in our economy’s downfall was the housing debacle. Our government wanted everybody to own their own home and so it encouraged lenders to lend to anybody and everybody.
It got so ridiculous that people without jobs were getting loans; big loans. The reason this could happen is that the “loan originator” didn’t give a shit if you were qualified for the loan or not, he or she just turned around and instantly sold the loan to another mortgage entity; he made his commission and that was that, he did not care if the people could pay the loan back or not.
The people buying those loans bundled them into MBS (mortgage backed securities) which they sold on the open market. Everybody was making tons of money until the shit hit the fan or when those risky loans collapsed.
So in today’s Wall Street Journal I was surprised to read that Obama was advocating doing away with Freddie Mac (Federal Home Loan Mortgage Corporation) and Fannie Mae (Federal National Mortgage Association) the major buyers of those loans; taxpayers have already spent billions to prop these companies up.
This is huge because it basically says that the government needs to step out of the mortgage business. Don’t get me wrong, there still is a Ginnie Mae ( Government National Mortgage Administration) which guarantees loans made by the Veteran’s Administration (VA Loans) for soldiers and FHA loans (Federal Housing Administration) among others, to help people otherwise unqualified to obtain loans on their own and Ginnie Mae is a 100% government entity whereas Freddie and Fannie are not.
Yes, this will make getting mortgage loans more difficult or as difficult as when I was trying to get a loan; had to sign my life away and they checked every bill I ever paid to make sure I was never late in paying.
Some of the programs that helped people buy homes goes back all the way to the Great Depression where Roosevelt tried to help people buy homes because he believed that the U.S. should be a country of homeowners; nice concept but unrealistic.
I maintain that in the U.S.
I just had to bring this matter up because it is such a historic shift in our government’s attitude towards home ownership. More to come as things develop…
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