Fannie, Freddie insolvent?

[Sandi Egan]

[quote=bsrsharma]Market seems to think so. If they actually shutdown, there may be very few mortgage originations (due to lack of secondary market liquidity and weakness in banks’ capital) and that will practically shutdown real estate market. The prices may tumble down much faster in such a scenario. It is probably not a wise move to buy RE now (though, it is a smart thing to sell, if one needs to sell in a time frame of year or two).[/quote]

An excellent point. If the bailout actually happens, the interest rates and downpayment requirements will spike and the qualified borrowers will be all but extinct.
This particular taxpayer is going to reward himself with a dirt-cheap mansion in CV in that scenario.

[kev374]

they are already close to insolvent. They don’t want to admit it since it will send the market into a panic and their shares will go to junk status overnight.

[kev374]

they are already close to insolvent. They don’t want to admit it since it will send the market into a panic and their shares will go to junk status overnight.

[kev374]

they are already close to insolvent. They don’t want to admit it since it will send the market into a panic and their shares will go to junk status overnight.

[kev374]

they are already close to insolvent. They don’t want to admit it since it will send the market into a panic and their shares will go to junk status overnight.

[kev374]

they are already close to insolvent. They don’t want to admit it since it will send the market into a panic and their shares will go to junk status overnight.

[HereWeGo]

If FNM and FRE are bailed out, what happens to lending standards? What will the govt demand in terms of down payment and interest rate?

[HereWeGo]

If FNM and FRE are bailed out, what happens to lending standards? What will the govt demand in terms of down payment and interest rate?

[HereWeGo]

If FNM and FRE are bailed out, what happens to lending standards? What will the govt demand in terms of down payment and interest rate?

[HereWeGo]

If FNM and FRE are bailed out, what happens to lending standards? What will the govt demand in terms of down payment and interest rate?

[HereWeGo]

If FNM and FRE are bailed out, what happens to lending standards? What will the govt demand in terms of down payment and interest rate?

[jficquette]

[quote=HereWeGo]If FNM and FRE are bailed out, what happens to lending standards? What will the govt demand in terms of down payment and interest rate?[/quote]

I just saw a story on them on Bloomberg. They were saying that Fannie Mae owns some $6 Trillion in Mortgages.

They are beyond bailout.

If the government wanted to get into the mortgage business they could create a tax free mortgage where the investor who buys it doesn’t pay income tax on it while the homeowner can’t deduct it off their taxes. They could make it just for low income people who don’t get the benefit of the deduction anyway. Because the investor doesn’t pay income tax the interest rate would be about 75-80% of “market”.

Another way to finance mortgages would be if Congress would ever put the SS revenues into an actually trust and not spend it like we do now. We could take the SS money that is fed into the fund and use it to finance mortgages. At 4-5% that would be a decent return. These loans would only be available to lower income, middle class first time home buyers etc.

John

[jficquette]

[quote=HereWeGo]If FNM and FRE are bailed out, what happens to lending standards? What will the govt demand in terms of down payment and interest rate?[/quote]

I just saw a story on them on Bloomberg. They were saying that Fannie Mae owns some $6 Trillion in Mortgages.

They are beyond bailout.

If the government wanted to get into the mortgage business they could create a tax free mortgage where the investor who buys it doesn’t pay income tax on it while the homeowner can’t deduct it off their taxes. They could make it just for low income people who don’t get the benefit of the deduction anyway. Because the investor doesn’t pay income tax the interest rate would be about 75-80% of “market”.

Another way to finance mortgages would be if Congress would ever put the SS revenues into an actually trust and not spend it like we do now. We could take the SS money that is fed into the fund and use it to finance mortgages. At 4-5% that would be a decent return. These loans would only be available to lower income, middle class first time home buyers etc.

John

[jficquette]

[quote=HereWeGo]If FNM and FRE are bailed out, what happens to lending standards? What will the govt demand in terms of down payment and interest rate?[/quote]

I just saw a story on them on Bloomberg. They were saying that Fannie Mae owns some $6 Trillion in Mortgages.

They are beyond bailout.

If the government wanted to get into the mortgage business they could create a tax free mortgage where the investor who buys it doesn’t pay income tax on it while the homeowner can’t deduct it off their taxes. They could make it just for low income people who don’t get the benefit of the deduction anyway. Because the investor doesn’t pay income tax the interest rate would be about 75-80% of “market”.

Another way to finance mortgages would be if Congress would ever put the SS revenues into an actually trust and not spend it like we do now. We could take the SS money that is fed into the fund and use it to finance mortgages. At 4-5% that would be a decent return. These loans would only be available to lower income, middle class first time home buyers etc.

John

[jficquette]

[quote=HereWeGo]If FNM and FRE are bailed out, what happens to lending standards? What will the govt demand in terms of down payment and interest rate?[/quote]

I just saw a story on them on Bloomberg. They were saying that Fannie Mae owns some $6 Trillion in Mortgages.

They are beyond bailout.

If the government wanted to get into the mortgage business they could create a tax free mortgage where the investor who buys it doesn’t pay income tax on it while the homeowner can’t deduct it off their taxes. They could make it just for low income people who don’t get the benefit of the deduction anyway. Because the investor doesn’t pay income tax the interest rate would be about 75-80% of “market”.

Another way to finance mortgages would be if Congress would ever put the SS revenues into an actually trust and not spend it like we do now. We could take the SS money that is fed into the fund and use it to finance mortgages. At 4-5% that would be a decent return. These loans would only be available to lower income, middle class first time home buyers etc.

John

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