[quote=bearishgurl]”Fannie, Freddie and the FHA” were in place LONG BEFORE independent mortgage brokers began originating an abundance on NINA mortgages, I/O “exploding mortgages,” limited-doc programs and using every avenue to defraud the lender (fabricating tax returns for the client/fabricating W-2’s/bank statements/investment statements and/or fabricating business licenses or asking the client to obtain a business license and then washing it and backdating it). This all went on in broad daylight right here in SD County for several years! “Fannie, Freddie and the FHA” are probably not going anywhere.[/quote]You just stated the obvious, but how does that contradict my statement that the so-called GSEs contribute to keep prices artifically inflated today?

[quote]The “courts” are only “meddling” in “judicial foreclosure states.” CA is not one of these.[/quote]Again, you state the obvious. This thread is not about foreclosures in CA.

We are about the enter a relatively high inflation period; obviously not this week or next quarter, but at some point all the liquidity injected into the system will result in a devalued dollar (menaing, everything will cost more in dollars). Therefore, it makes no sense that someone would lend hundreds and hundreds of thousands of dollars at a fixed rate for 30 years at a ridiculously low interest rate of below 5%.

It makes no sense, of course, until you realize that Fannie and Freddie guarantee those loans! Then no wonder Wells Fargo is so nice to home buyers lending them money for such a low interest rate: It’s Uncle Sam who is left holding the bag!

CA Renter got it right above. If we take out the GSEs, there would be no market… or more appropriately said, the market would require that house prices drop and interest rates increase to more realistic levels.

BTW, “GSEs” is no longer what these entities are. They are now part of the Federal Government and their obligations are part of the national debt.