Posts Tagged ‘political campaigns’

Overhaul Fannie and Freddie? Why?

March 7th, 2013 Comments off

As washingtonpost informs MHProNews, while Fannie Mae and Freddie Mac have been vilified for allegedly causing the financial meltdown, for being bailed out by the government to the tune of $131 billion, and for taking business from private firms, neither the Democrats nor the Republicans are actively doing much to change the GSE landscape. While they remain for-profit entities, they are backed by the government, and despite the criticism, they were the only home finance game in town in 2009 when banks were not interested in making home loans. As Neal Irwin says, the housing collapse would have been much worse had Fannie and Freddie not been around. The reason the overhaul has not happened is because there are too many vested interests in keeping the system as it is. Accounting for 90 percent of U. S. mortgages keeps originators, servicers, lenders, banks, and builders pretty busy, not to mention the contributions from the GSEs to political campaigns.

(Image credit: Federal Housing Administration)

Solution to Foreclosed Properties?

January 10th, 2012 2 comments

CNBC tells the Obama administration’s plan to speed-up the housing recovery process may be to sell government-owned foreclosed real estate in bulk to investors who will then rent the properties. Since banks may be reluctant to finance the purchases, the government may offer a subsidy to the investors by guaranteeing a portion of the loans. This in turn will encourage lenders to offer interest rates low enough that investors can turn a profit. Because of financial risks the government will assume, regulators will likely choose investors who meet certain criteria and have demonstrated their ability in the real estate arena, resulting in a lock for established investors. The article cautions that it may also be a way to reward those who may donate to political campaigns.

(Photo credit: Wikipedia)