• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Freddie Mac seeks further $10.6bn in US aid

J

jujuman13

DP Veteran
Joined
Jun 1, 2006
Messages
4,075
Reaction score
579
Gender
Male
Political Leaning
Independent
Link
BBC News - Freddie Mac seeks further $10.6bn in US aid

Quote(US mortgage giant Freddie Mac saw a loss of $8bn (£5.3bn) in the first three months of 2010 and said it would ask for a further $10.6bn in state aid.)

In my opinion it would be an Obamanation to continue dripping cash into either of these organizations.
 
jujuman13 said:
Link
BBC News - Freddie Mac seeks further $10.6bn in US aid

Quote(US mortgage giant Freddie Mac saw a loss of $8bn (£5.3bn) in the first three months of 2010 and said it would ask for a further $10.6bn in state aid.)

In my opinion it would be an Obamanation to continue dripping cash into either of these organizations.
Click to expand...

They will have to continue to put money into them. Of course, it will be a collossal failure as it has been up to this point. But re-elections hinge on continuing to fund mortgages from the government. Politicians need to show they are "standing with the people" and "helping the American people". Yes, it's stupid, yes it's politicized and yes dumping money down the toilet like this is mostly to help politicians and continue to force government run organizations that fail constantly on us.

Let. Them. Fail. No more bail outs of any kind. We can't afford it.
 
Yea let em fail, and watch 60%+ of Americans get forced out of their homes. Long live the rich, screw the middle class and poor!
 
PeteEU said:
Yea let em fail, and watch 60%+ of Americans get forced out of their homes. Long live the rich, screw the middle class and poor!
Click to expand...

Yep - best thing that will ever happen to us. Glad you agree!
 
IMO, even as I am not happy about providing additional funds to Freddie Mac, I believe that rather than denying the GSE the funds, a better approach would entail:

1. Capping new mortgage activity at current levels (total dollars) for a period of years.
2. Lowering the conforming loan limits for first mortgages to partially reflect the housing price decline that has occurred perhaps by 5%-10% (smaller than the actual price decline that occurred) and capping them at those figures for 5 or more years.
3. A strict bar on working with non-conforming loans.

The benefits of those three measures would be:

1. More mortgages processed (same pool of dollars but smaller conforming loan limits).
2. A disincentive for new homeowners to take on excessive leverage.
3. The GSE would no longer participate in working with very high leverage deals.

Macroeconomically, the benefits of the approach would entail:

1. Helping avoid a renewed decline in home prices. Price stability/modest appreciation could define home price trends.
2. Total mortgage debt as a share of the economy would gradually decline toward sustainable levels. There is a long way to go before that happens, and a gradual decline (mainly due to growth in mortgage debt lagging economic growth) would be far less disruptive than trying to bring mortgage debt levels to sustainable levels in an overly short period of time.

Politically, at least from some quarters and regions in the country, the above approach would be very unpopular. Yet, no matter how opposition would be spun, it was the mortgage debt overhang (and related financial instruments built around that debt) that played a very large role in producing the financial system fragility and near collapse of the U.S. financial system when the housing bubble burst. Larger macroeconomic interests, including the compelling interest of reducing overall mortgage debt to sustainable levels, should take precedence over narrower political/regional interests, especially as the nation is moving toward an increasing need for even larger, more difficult austerity with respect to its public finances.
 
Last edited:
PeteEU said:
Yea let em fail, and watch 60%+ of Americans get forced out of their homes. Long live the rich, screw the middle class and poor!
Click to expand...

The bailout will prop up Freddie, but it won't keep those people in their homes. Long live Fannie and Freddie, but screw the homebuyers.

I say let them all see the fate of their bad decisions. Don't make the rest of us pay for those decisions.
 
Erod said:
The bailout will prop up Freddie, but it won't keep those people in their homes. Long live Fannie and Freddie, but screw the homebuyers.

I say let them all see the fate of their bad decisions. Don't make the rest of us pay for those decisions.
Click to expand...

Notice how Fannie Mae and Freddie Mac aren't even mentioned in the Financial Bailout Package? Our politicians once again screw the taxpayer by attacking private business which diverts from their own failure to manage their own. I heard about the "huge" bonuses for private business but not much if any about the big packages received by people like Franklin Raines and other govt. appointed "managers" of Freddie Mac and Fannie Mae. Liberal diversion at its best.
 
the favored f's are EXEMPT from dead dodd's deal

RealClearPolitics - Politics - May 08, 2010 - Shelby: Bank bill should include mortgage firms

don't you think fannie and fred should be included in reform?

without shelby, by the way, the bill goes nowhere

it's the FRONTISPIECE of the perplexed president's entire LEGISLATIVE PLATFORM

reg reform is #1

and either climate's #2 and immigration #3

or immigration #2 and climate #3

pelosi, et al, keep reversing themselves

immigration, by the way, to leadership means---citizenship

to opposition, immigration translates into common english as---borders

whose view of the issue will prevail?

climate, incidentally, does NOT mean cap and trade

that catastrophe was kaput in october

no, climate to the caucus currently is the kerry/graham compromise

the south carolina rhino, fundamentally, controls BOTH #'s 2 and 3, climate and the border

upshot---leadership's entire SLATE is STALLED

ie, he's completely incompetent

because without the convert from alabama wall street regulatory reform is impossible

and, in addition to calling out the f's favoritism, shelby yesterday just BLASTED dead dodd's deed for its "threat to our privacy"

'individuals could be required to provide the new agency with written answers---under oath---to any question posed by the bureau regarding their personal financial information,” complained the pivot republican at his purposefully put together presser

CNSNews.com - Sen. Shelby: Financial Reform Violates Privacy

who cares if he's right or wrong

the point is the president needs him, and shelby sure doesn't sound cooperative

the exclusion of fannie and fred, more responsible perhaps than any entity for arriving us here, is unsupportable

typical obama
 
Last edited:
Ockham said:
Yep - best thing that will ever happen to us. Glad you agree!
Click to expand...

Why do you even bother?

I say let them all see the fate of their bad decisions. Don't make the rest of us pay for those decisions.
Click to expand...

Yeah. Just make conservatives do it so I can watch them squirm.

I would love to see a "Liberal Exemption" tax break.
 
Last edited:
Conservative said:
Notice how Fannie Mae and Freddie Mac aren't even mentioned in the Financial Bailout Package? Our politicians once again screw the taxpayer by attacking private business which diverts from their own failure to manage their own. I heard about the "huge" bonuses for private business but not much if any about the big packages received by people like Franklin Raines and other govt. appointed "managers" of Freddie Mac and Fannie Mae. Liberal diversion at its best.
Click to expand...

an important lesson for all of us tempted to buy the argument that the Public Option would have been an equal competitor with private insurance.
 
PeteEU said:
Yea let em fail, and watch 60%+ of Americans get forced out of their homes. Long live the rich, screw the middle class and poor!
Click to expand...

Until they've paid for them, they are not their homes.
Just as illegal aliens are not legal residents.
Just as a car isn't yours if you quit making payments on it.

For those that can't afford to buy, there is always renting.

And the government's intervention into the housing market has made the housing market unpredictable for investors.

Who is going to scoop up homes, turn around and rent them out, when the government it bailing out people who bought too much or shouldn't have bought at all?

.
 
1. f&f are EXEMPT from dodd's deal

2. real estate analysts are expecting FOUR POINT FIVE MILLION more foreclosures in terrible 2010, UP SIXTY PERCENT over awful '09, the year of sorrow, the year of obama

3. MORE THAN HALF who received HAMP, mortgage modifications, have already REDEFAULTED

4. obama's answer---more of the same

5. the eu's answer to greece---more of the same

6. greece's response to the eu---drop dead

7. more of the same---TODAY fannie wants 8.4B

8. on christmas eve obama's treasury arranged for a roofless reconstruction of the f's, the previous cap had been 400B

Housing market's recovery appears at risk - Boston.com

Half of U.S. Home Loan Modifications Default Again (Update1) - Bloomberg.com

Europe Crisis Deepens As Chaos Grips Greece - WSJ.com

My Way News - Fannie Mae seeks $8.4B in aid after 1Q loss
 
PeteEU said:
Yea let em fail, and watch 60%+ of Americans get forced out of their homes. Long live the rich, screw the middle class and poor!
Click to expand...

Link to that being the probable result?
 
PeteEU said:
Yea let em fail, and watch 60%+ of Americans get forced out of their homes. Long live the rich, screw the middle class and poor!
Click to expand...

Well, isn't it the government who screwed the middle class and the poor by passing laws that made banks lend to people who couldn't afford to pay back loans?

So when you chastize the rich, is it really the "private" rich guy, or more like the "public" rich guy? There is a difference. The private rich guy would never have loaned money to people who couldnt pay it back unless the government through law, told him he had to or face public ridicule and fear of being termed "racists".
 
TheHat said:
Well, isn't it the government who screwed the middle class and the poor by passing laws that made banks lend to people who couldn't afford to pay back loans?

So when you chastize the rich, is it really the "private" rich guy, or more like the "public" rich guy? There is a difference. The private rich guy would never have loaned money to people who couldnt pay it back unless the government through law, told him he had to or face public ridicule and fear of being termed "racists".
Click to expand...

Long and short answer is no


The government did not screw the middle class by passing laws that MADE the banks lend to people who could not afford to pay them back

The CRA was passed in 1977 or so

As for rich people lending money to people who could not pay it back

Yes they would if they could dump that loan on some chump who thought they were buying a safe and secur invesment which a Triple A rating is supposed to indicate. The rich person making the loan makes money by making the loans, then gets rid of the risk, a sweet business provided you can dump the loans before they go bad. Country Wide (which was not subject to the CRA) didnt dump its bad loans quick enough and went bust
 
zimmer said:
Until they've paid for them, they are not their homes.
Just as illegal aliens are not legal residents.
Just as a car isn't yours if you quit making payments on it.

For those that can't afford to buy, there is always renting.
Click to expand...

Yea and since Fannie and Freddie account for 55% of the US mortgage market, if they go bust, then the creditors will come calling. That means 55% of all homes will have to have their value realized in some way. Good luck on that. So you expect that companies will buy these homes and rent them back to the people living in them? Buy with what money? They cant get credit to buy.. and we are talking about trillions.

And the government's intervention into the housing market has made the housing market unpredictable for investors.
Click to expand...

What a load of revisionist crap. It was the unregulated cowboy sub-prime lending market that caused the problem. If anything it was a lack of government intervention. When will conservatives stick to the facts for once?

Who is going to scoop up homes, turn around and rent them out, when the government it bailing out people who bought too much or shouldn't have bought at all?
Click to expand...

Government aint bailing anyone out. And you do not grasp the problem at all.

Let me explain..

The unregulated sub-prime mortgage market, something that Fannie and Freddie was not part off, caused a huge majority of the initiate problems. As long as the housing prices were going up then all was fine but they started to fall. Suddenly people who should never have been given loans were in over their heads and bankruptcies started. Problem is these mortgages were sold along with good mortgages in financial packages that was of course given an AAA rating by the rating agencies despite being full of crap loans. This mean the true value of these assets were unknown and that meant the banks had to pull the plug on credit to assure and asses the situation.

This meant the credit crunch and without credit the economy grinds to a halt, which leads to a recession. And who is the first to get fired in a recession? The very people Fannie and Freddie were made to accommodate. Hence then suddenly Fannie and Freddie became a problem too to the glee of the conservative movement but the peril of the US economy considering they were guaranteeing 55% of the mortgage market .

But it is funny how the conservative movement blame Fannie and Freddie for everything but ignore WAPU (or whatever it was called) and all the other banks who issued sub-prime loans on an unregulated market, like there was no tomorrow and of these loans a huge majority failed.
 
TheHat said:
Well, isn't it the government who screwed the middle class and the poor by passing laws that made banks lend to people who couldn't afford to pay back loans?
Click to expand...

No. The defualt rate in Fannie and Freddie pre crisis was lower than the other 45% of the market. Much lower.

The people given loans via Fannie and Freddie COULD afford it, and that is the point. Fannie and Freddie have a set of rules that has to be followed and far from all qualify for a loan. On top of that Fannie and Freddie does not peddle teaser loans as far as I know.

It was the unregulated cowboy sub-prime market that was selling loans to people that they could not afford. When housing prices started to fall and the teaser rates started to stop, then these people could not pay the loans with new loans or the cash they did not have.

So when you chastize the rich, is it really the "private" rich guy, or more like the "public" rich guy?
Click to expand...

It is the private sector.. they cause the problem with the help of the government ignoring what they were doing. There is no way around it.. you conservatives can throw as much mud against Fannie and Freddie as you want, but the facts are very clear.. Fannie and Freddie were not the root cause of the sub-prime crisis..

The private rich guy would never have loaned money to people who couldnt pay it back unless the government through law, told him he had to or face public ridicule and fear of being termed "racists".
Click to expand...

The point is they could pay the loans back and have been paying the loans back for 40+ years. They STILL pay loans back, but because of the recession some do not because they lost their jobs. We are still talking about under 5% of the loans that Fannie and Freddie have going into default. That is still way lower than what happened at Washington Mutal

The "rich" guy as you called it, would never lend money to a huge majority of the American public to buy a home because they would not earn enough on the deal. The American dream of owning your own house was only made possible because of Fannie and Freddie and I bet that is what pisses off the conservatives.
 
RightinNYC said:
Link to that being the probable result?
Click to expand...

So, tell me.. when someone goes belly up.. what happens?

They for one have to realize all assets no? That is 55% of the US mortgage market. How do you do that? By selling it to the people? Renting out? Selling to the private sector? Remember we are talking about over 6 trillion dollars worth of assets.

While all this is going on, you have 55% of the US population living in homes they dont know if they will be able to live in the next day. What do you think that will do to the economy?
 
PeteEU said:
So, tell me.. when someone goes belly up.. what happens?

They for one have to realize all assets no? That is 55% of the US mortgage market. How do you do that? By selling it to the people? Renting out? Selling to the private sector? Remember we are talking about over 6 trillion dollars worth of assets.

While all this is going on, you have 55% of the US population living in homes they dont know if they will be able to live in the next day. What do you think that will do to the economy?
Click to expand...

When someone goes belly up they fail and in our society that is going to happen no matter how much social engineering you do. How many of those people who defaulted the first time are defaulting again after being bailed out?

Stop thinking with your heart and think with your brain. Why would anyone buy something that they cannot afford? Does the word personal responsibility have any place in your world?
 
PeteEU said:
So, tell me.. when someone goes belly up.. what happens?

They for one have to realize all assets no? That is 55% of the US mortgage market. How do you do that? By selling it to the people? Renting out? Selling to the private sector? Remember we are talking about over 6 trillion dollars worth of assets.

While all this is going on, you have 55% of the US population living in homes they dont know if they will be able to live in the next day. What do you think that will do to the economy?
Click to expand...

Ah, so refusing to offer Freddie this $10.6b would result in 55% of the US mortgage market collapsing? I think you're missing a few steps somewhere in there.
 
RightinNYC said:
Ah, so refusing to offer Freddie this $10.6b would result in 55% of the US mortgage market collapsing? I think you're missing a few steps somewhere in there.
Click to expand...

If the refusal in the 10.6 billion caused Freddi to go bankrupt, many of mortgages that it has either securitized or insured might be called in being one issue

Another issue is that Freddi and Fannie are right now are backing over 80% if I recall correctly of all new mortgages in the US, at a low interest rate. (at least lower then what private institutions would be willing to offer. If Freddi and Frannie no longer were backing new mortgages, the housing market would take another large drop in demand. Such a drop in demand would lead to another drop in housing prices, and of course more strategic defaults and foreclosures
 
PeteEU said:
Yea let em fail, and watch 60%+ of Americans get forced out of their homes. Long live the rich, screw the middle class and poor!
Click to expand...

If we are going to keep throwing tax dollars in Freddie Mac's hole, we're all going to be out of our homes. The money we give them goes straight into the corporate elite's pocket, not to the employees. If we give Freddie Mac another bailout, next year they will come back asking for more.
 
Phantom said:
If we are going to keep throwing tax dollars in Freddie Mac's hole, we're all going to be out of our homes. The money we give them goes straight into the corporate elite's pocket, not to the employees. If we give Freddie Mac another bailout, next year they will come back asking for more.
Click to expand...

Freddie and Fannie need money because of the recession. Because normally solvent people are not able to make their mortgages. And that all comes back to what the private sector did to get the US into the crapper it is in now.. :2wave:
 
You must log in or register to reply here.
Back
Top Bottom