No Limits on the GSEs

[SD Realtor]

Wow I am surprised that there is no discussion on the limits being removed from the GSEs… They can buy as many mortgages as they want now.

[Deal Hunter]

There’s a big difference between Fannie and Freddie “buying” mortgages and “insuring” them.

They still need to “buy” the mortgages, which means they still need to have capital or credit to do so. Back to the same problem everyone else has. Just because caps were lifted doesn’t mean money will now be thrown at them to buy up all those “iffy” mortgages for “iffy” people.

So with limited capital, they will need to stick to insuring mortgages instead of buying them outright – to make the limited capital go farther. Now, to insure mortgages, they have to asses risk – which means insuring the better loans under stricter standards.

Er, seems we’re back where we started.

[Deal Hunter]

There’s a big difference between Fannie and Freddie “buying” mortgages and “insuring” them.

They still need to “buy” the mortgages, which means they still need to have capital or credit to do so. Back to the same problem everyone else has. Just because caps were lifted doesn’t mean money will now be thrown at them to buy up all those “iffy” mortgages for “iffy” people.

So with limited capital, they will need to stick to insuring mortgages instead of buying them outright – to make the limited capital go farther. Now, to insure mortgages, they have to asses risk – which means insuring the better loans under stricter standards.

Er, seems we’re back where we started.

[Deal Hunter]

There’s a big difference between Fannie and Freddie “buying” mortgages and “insuring” them.

They still need to “buy” the mortgages, which means they still need to have capital or credit to do so. Back to the same problem everyone else has. Just because caps were lifted doesn’t mean money will now be thrown at them to buy up all those “iffy” mortgages for “iffy” people.

So with limited capital, they will need to stick to insuring mortgages instead of buying them outright – to make the limited capital go farther. Now, to insure mortgages, they have to asses risk – which means insuring the better loans under stricter standards.

Er, seems we’re back where we started.

[Deal Hunter]

There’s a big difference between Fannie and Freddie “buying” mortgages and “insuring” them.

They still need to “buy” the mortgages, which means they still need to have capital or credit to do so. Back to the same problem everyone else has. Just because caps were lifted doesn’t mean money will now be thrown at them to buy up all those “iffy” mortgages for “iffy” people.

So with limited capital, they will need to stick to insuring mortgages instead of buying them outright – to make the limited capital go farther. Now, to insure mortgages, they have to asses risk – which means insuring the better loans under stricter standards.

Er, seems we’re back where we started.

[Deal Hunter]

There’s a big difference between Fannie and Freddie “buying” mortgages and “insuring” them.

They still need to “buy” the mortgages, which means they still need to have capital or credit to do so. Back to the same problem everyone else has. Just because caps were lifted doesn’t mean money will now be thrown at them to buy up all those “iffy” mortgages for “iffy” people.

So with limited capital, they will need to stick to insuring mortgages instead of buying them outright – to make the limited capital go farther. Now, to insure mortgages, they have to asses risk – which means insuring the better loans under stricter standards.

Er, seems we’re back where we started.

[SD Realtor]

Yes I agree they do have to raise the capital to buy them and I don’t know how they will get it. However not having a restriction is a first step wouldn’t you agree?

Not that it matters in the long run. Wouldn’t you say that if the secondary market locked up somehow, that our favorite federal government would step in? Don’t they already take junk debt as collateral at the discount window? I heard the ECB has already taken on 90B worth of it as well….

If you are as jaded as I am I think you would agree that nothing happens in one fell swoop. In the long run one can look back and see several steps that occurred and it all pieces together quite nicely. Down the road when things get worse there will be other more desperate measures that the government will need to resort to. Larger plans get implemented in piecemeal manners. To me this is one of them.

I guess we will see what happens yeah?

SD Realtor

[SD Realtor]

Yes I agree they do have to raise the capital to buy them and I don’t know how they will get it. However not having a restriction is a first step wouldn’t you agree?

Not that it matters in the long run. Wouldn’t you say that if the secondary market locked up somehow, that our favorite federal government would step in? Don’t they already take junk debt as collateral at the discount window? I heard the ECB has already taken on 90B worth of it as well….

If you are as jaded as I am I think you would agree that nothing happens in one fell swoop. In the long run one can look back and see several steps that occurred and it all pieces together quite nicely. Down the road when things get worse there will be other more desperate measures that the government will need to resort to. Larger plans get implemented in piecemeal manners. To me this is one of them.

I guess we will see what happens yeah?

SD Realtor

[SD Realtor]

Yes I agree they do have to raise the capital to buy them and I don’t know how they will get it. However not having a restriction is a first step wouldn’t you agree?

Not that it matters in the long run. Wouldn’t you say that if the secondary market locked up somehow, that our favorite federal government would step in? Don’t they already take junk debt as collateral at the discount window? I heard the ECB has already taken on 90B worth of it as well….

If you are as jaded as I am I think you would agree that nothing happens in one fell swoop. In the long run one can look back and see several steps that occurred and it all pieces together quite nicely. Down the road when things get worse there will be other more desperate measures that the government will need to resort to. Larger plans get implemented in piecemeal manners. To me this is one of them.

I guess we will see what happens yeah?

SD Realtor

[SD Realtor]

Yes I agree they do have to raise the capital to buy them and I don’t know how they will get it. However not having a restriction is a first step wouldn’t you agree?

Not that it matters in the long run. Wouldn’t you say that if the secondary market locked up somehow, that our favorite federal government would step in? Don’t they already take junk debt as collateral at the discount window? I heard the ECB has already taken on 90B worth of it as well….

If you are as jaded as I am I think you would agree that nothing happens in one fell swoop. In the long run one can look back and see several steps that occurred and it all pieces together quite nicely. Down the road when things get worse there will be other more desperate measures that the government will need to resort to. Larger plans get implemented in piecemeal manners. To me this is one of them.

I guess we will see what happens yeah?

SD Realtor

[SD Realtor]

Yes I agree they do have to raise the capital to buy them and I don’t know how they will get it. However not having a restriction is a first step wouldn’t you agree?

Not that it matters in the long run. Wouldn’t you say that if the secondary market locked up somehow, that our favorite federal government would step in? Don’t they already take junk debt as collateral at the discount window? I heard the ECB has already taken on 90B worth of it as well….

If you are as jaded as I am I think you would agree that nothing happens in one fell swoop. In the long run one can look back and see several steps that occurred and it all pieces together quite nicely. Down the road when things get worse there will be other more desperate measures that the government will need to resort to. Larger plans get implemented in piecemeal manners. To me this is one of them.

I guess we will see what happens yeah?

SD Realtor

[patientrenter]

Spot on, SDR! This just allows the GSEs to wade in deeper. They want to, and they are being told to. They will wade in deeper.

If and when they stumble and are in danger of getting submerged, the federales will arrive. There will be shock, absolute shock, at the discovery that 80-95% non-recourse loans that were made at today’s So Cal prices are going bad. Since no one could have known that, there will be a rescue for the good ol’ Fannie and Freddie brownies/boy scouts, and the homeowners and investors all. It’s so patently obvious what’s happening.

Patient renter in OC

[patientrenter]

Spot on, SDR! This just allows the GSEs to wade in deeper. They want to, and they are being told to. They will wade in deeper.

If and when they stumble and are in danger of getting submerged, the federales will arrive. There will be shock, absolute shock, at the discovery that 80-95% non-recourse loans that were made at today’s So Cal prices are going bad. Since no one could have known that, there will be a rescue for the good ol’ Fannie and Freddie brownies/boy scouts, and the homeowners and investors all. It’s so patently obvious what’s happening.

Patient renter in OC

[patientrenter]

Spot on, SDR! This just allows the GSEs to wade in deeper. They want to, and they are being told to. They will wade in deeper.

If and when they stumble and are in danger of getting submerged, the federales will arrive. There will be shock, absolute shock, at the discovery that 80-95% non-recourse loans that were made at today’s So Cal prices are going bad. Since no one could have known that, there will be a rescue for the good ol’ Fannie and Freddie brownies/boy scouts, and the homeowners and investors all. It’s so patently obvious what’s happening.

Patient renter in OC

[patientrenter]

Spot on, SDR! This just allows the GSEs to wade in deeper. They want to, and they are being told to. They will wade in deeper.

If and when they stumble and are in danger of getting submerged, the federales will arrive. There will be shock, absolute shock, at the discovery that 80-95% non-recourse loans that were made at today’s So Cal prices are going bad. Since no one could have known that, there will be a rescue for the good ol’ Fannie and Freddie brownies/boy scouts, and the homeowners and investors all. It’s so patently obvious what’s happening.

Patient renter in OC

[Author]

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