Interesting article from the New York Times about the possible demise of the 30-year, fixed-rate mortgage. Reading it, I discovered that, Fannie Mae and Freddie Mac's involvement in the collapse of the housing market has gone from a wild, unproven right-wing assertion (probably dreamed up by the Koch brothers in between selling babies at a profit and bilking widows) to Received Wisdom. Hunh.
The comments are a scream, though possibly not in the sense of amusement; all the usual hobbyhorses are trotted out, from the guy who thinks that, because he had a budget and wrote it all down (in ink and everything!) and now prices are rising, he's being ripped off to the blame-the-GOP 'tards who seem to think the cause must be the overweening greed of lenders rather the short-sighted concupiscence of those who bought homes they could not afford and were allowed to thanks to improvident Federal policies. They're all shouting, nobody's listening, and, oddly enough, none of 'em appear to be living in discarded appliance boxes.
Yet.
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ReplyDeleteWho is John Galt?
ReplyDeleteThere is plenty of blame available for everyone. Read this:
ReplyDeletehttp://street-pharmacy.blogspot.com/2010/04/political-and-legal-roots-of.html
My house is kind of a scary, never-ending construction zone . . . . but I've never had to miss a payment and will soon (August) be able to begin paying triple payments to knock it off the books. I thank whatever people thank in these situations, because when I bought it, I didn't have any special insight others lacked as far as I know; I was just scared to death of signing on for 30 years of debt and kept backing out of deals that seemed shady.
ReplyDeleteI mentioned to my wife yesterday that we'd done things backwards; we decided we had to buy a house RIGHT NOW (why?) and looked for something we could afford, so we ended up with a money pit with a lot of hidden costs. We should have decided that we wanted to buy a house eventually, looked around at what the houses we liked were costing people, and made a plan to afford such a house with a realistic estimate of how many years it would take.
But even at that, there was a third way--allow yourself to be persuaded that everybody buys way more house than they can afford, and you can too. Apparently that allowed people to combine the "dream house" part we missed with the "right NOW" part we didn't avoid.
So, am I still a filthy Tea-bagger for suggesting that much of this problem might have been due to government interference?
ReplyDeleteWhy, of course you are, and heartless, too. For shame.
ReplyDeleteFWIW, I work for one of the aforementioned entities. While not completely blameless, we had lots of help from the FEDGOV - HHS in particular. See this article for some details:
ReplyDeletehttp://www.villagevoice.com/2008-08-05/news/how-andrew-cuomo-gave-birth-to-the-crisis-at-fannie-mae-and-freddie-mac/
BTW - the "EVIL" Fannie/Freddie own about 9% of the sub-prime loans. The rest are owned by the private sector banks who couldn't get enough of 'em trying to reap fat profits. Those same private sector actors have now abandoned the market completely. If not for Fannie and Freddie, there would be virtually no mortgage lending at all just now as FHA cannot hope to satisfy the demand.
Yes, we're still losing $$$, but a large part of that is because we're trying to implement impossible policies pushed by the current occupant of the White House (HAFT and HAMP, anyone?). And don't forget - part of our "loss" (and subsequent requests to the treasury for additional funding) are driven by the fact that last year alone we paid 1.6 Billion in dividends to the US Treasury.
That was the whole point, Anon. On the one side, you had FedGov saying they were behind the Freddie/Fannie loans, making them a "sure thing," no matter how underqualified the buyer; on the other side, the Feds were pushing hard to get lenders behind their avowed goal of more widespread home ownership. Result: optimistic and/or foolish folks who would not have been been able to get loans on account of not being likely to pay 'em back, did get them. Eventually it went smash. Paint me surprised; it'll take several coats.
ReplyDeleteReading it, I discovered that, Fannie Mae and Freddie Mac's involvement in the collapse of the housing market has gone from a wild, unproven right-wing assertion (probably dreamed up by the Koch brothers in between selling babies at a profit and bilking widows) to Received Wisdom. Hunh.
ReplyDeleteOceania has always been at war with Eastasia. Or the Koch Brothers. Or somebody.
Why, of course you are, and heartless, too. For shame.
ReplyDeleteOh, whew. I was worried there for a second. :D