Obama calls for limited government role re:mortgages

Discussion in 'Too Hot for Swamp Gas' started by leogator, Aug 6, 2013.

  1. leogator
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    leogator Active Member

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    President Barack Obama will call for Fannie Mae and Freddie Mac (FMCC) to be replaced with a government mortgage reinsurer that would sustain losses only in catastrophic circumstances.

    President Barack Obama until now has refrained from endorsing a particular approach to remaking the nation’s housing finance system, seeking to avoid a partisan battle.

    The president, in a speech today in Phoenix, will also renew calls for Congress to make it easier for homeowners to refinance their loans, according to administration officials.

    The president until now has refrained from endorsing a particular approach to remaking the nation’s housing finance system, seeking to avoid a partisan battle. Today he will outline basic principles that mirror those in a Senate bill backed by both Democrats and Republicans.

    “A reformed system must have a limited government role, encourage a return of private capital and put the risk and rewards associated with mortgage lending in the hands of private actors, not the taxpayers,” the White House said in fact sheet released to reporters yesterday."
    http://www.bloomberg.com/news/2013-08-06/obama-said-to-call-for-limited-u-s-mortgages-role.html
  2. QGator2414
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    QGator2414 VIP Member

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    Sounds good but call me pesemistic...

    What is going to defined as "catastrophic" along with...why is the government backing any loans?

    Followed by making it easier to refinance. Exactly how without guaranteeing stuff for the banks?
  3. G8trGr8t
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    G8trGr8t Premium Member

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    devil is always in the details, but we won't bother to read those until after we pass the law
  4. Gatorrick22
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    Gatorrick22 Well-Known Member

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    Another Obama idea... anther ruse in a Trojan horse. Has there ever been a government agency that hasn't grown in size and scope? This is the beginning of another socialist takeover.

    The government needs to get out of the mortgage business all together. The Barney Franks were the reason sub-primes killed that industry in the first place.

    I sure hope no one is fooled by this liar in the WH.
  5. corpgator
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    corpgator Well-Known Member

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    Why would we want to replace them now? They are raking in money hand over fist. By the end of the year they'll have paid off their bailout money and then will be returning 50+ billion per year.
  6. oragator1
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    oragator1 Premium Member

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    They won't be returning anything close to 50 billion a year long term.
    Right now it's the perfect storm for the GSEs...private label competition isn't back yet so they control the market and the credit rules which they can keep tight because rates are also at historically low levels so demand is high, the rapid price jumps meant their valuations skyrocketed, loan loss reserves shrunk, and their GFees are artificially high, trying to induce private capital back. Also, the Feds are limiting what they can spend on their budget each year because they don't want them to grow, so that extra cash goes back to the Feds too. Also,, the Feds have dictated that they sell off their held portfolio a certain percent each year until that gets to zero, so they are turning that cash over too. And then this year was extra special because both companies have or will release their deferred tax credits. Fannie still has another 11 billion on top of the 50bb they already released. and Freddie has around 30 billion more.
    But when private capital comes back and they have to compete for business, the quick valuation gains die out, rising rates kill the refi market etc, things will get back towards an equilibrium.
    Another point, the way the conservatorship was structured, they technically haven't paid a dime of principle, it's all been considered dividends. And the way it works is that they aren't just delivering profits, but any net worth above 3 billion dollars, so it's profit and valuation, which again means they can't invest much in their infrastructure to be viable long term (which was kind of the point of the legislation).
    And don't forget, there are shareholder lawsuits that want a piece of the profits, and amazingly enough, some lawyers believe they have a decent case.

    A lot is going on.
  7. gatordowneast
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    gatordowneast Premium Member

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    What one does thunders so loudly I cannot hear what they say. He also said he was going to have the most transparent administration in history. That is the only true campaign promise I think the man has kept. They are transparent in their attempt to change this country. Whether for the better or not, each of us can decide.
  8. dadx4
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    dadx4 Well-Known Member

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    If there is ANYTHING that is government that can go to the private sector the better. I know there is still fraud in the private sector but it's NOTHING compare to the public sector.
  9. gatordowneast
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    gatordowneast Premium Member

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    I'm sure Barry will put Barney Frank and Chris Dodd in leadership roles in whatever new structure is created. All will be fine.
  10. LeesGator
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    LeesGator Active Member

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    Good article on CNN a few days about the exploding foreclosures in certain states. Those states that had the most government intervention are now feeling the pain, where as states that let the market correct, are making great improvements. How about no government involvement except in cases of fraud?
  11. candymanfromgc
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    candymanfromgc Well-Known Member

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    They should not be in mortgages at all. It should be a private covenant between the buyer and the M. company.

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