The news media is bringing us more ignorant hand-wringing over Republican threats to sell off Fannie and Freddie...
What they fail to realize is that government intervention in the mortgage market doesn't lower costs, it just "spreads them around."
“Without government backing, private lenders likely would charge higher interest rates and demand more stringent lending standards.” (Wall Street Journal)So what’s the problem with that? We would also then have less defaults due to people buying houses they can’t afford. Government intervention masks the free market signals and creates distortions in the market, resulting in trillion dollar housing bubbles.
Freddie and Fannie are scams that transfer money from the treasury to private banks
“Standard & Poor's estimated in a report issued Thursday that the cost of rescuing the mortgage giants could reach $280 billion and an additional $400 billion would be needed to capitalize any entities that replace them.”They’ve actually cost us more than that. That figure is just over and above what these crony crapitalists normally cost us in a given fiscal year. Government has no business in the mortgage market. And don't give us that "interstate commerce" or "general welfare" crap, you progressives! Your perverse "regulations" have allowed banks and mortgage companies to make irresponsible loans and stick the taxpayer with the consequences.
“Fannie and Freddie have cost taxpayers $134 billion since the government took them over through conservatorship two years ago.” (Wall Street Journal)
Spreadin' it around
“The firms were created to buy mortgages from banks, freeing them to make more loans. Fannie and Freddie guarantee the loans and sell them to investors as securities, a process that has lowered borrowing costs and made 30-year loans more widely available.” (Wall Street Journal)Pure ignorance. Freddie and Fannie did not lower borrowing costs, they merely shifted them to the federal government, who in turn “spread them around,” forcing taxpayers to shoulder the burden.
Why is the federal government “freeing” private banks and mortgage companies, but not grocery stores or bicycle makers?
Big Government advocates justify it by lifting up home ownership for all as a lofty goal. Why? There's nothing wrong with renting, I did it most of my adult life.
Government bumbling caused this crash. Time for the bureaucratic poobahs to stop meddling in the private lives of the citizenry and instead start cleaning up the fiscal and regulatory mess they have created.
2 comments:
They had better get rid of them soon as it is starting all over again in order to inflate (to what extent they can) exsisting home sales, let alone new homes.
Now this does not take into account foreclosed homes on the market and the possible wrongful foreclosure practices. If the proceedings were unjustified in the foreclosure yet the house was sold, the new tenant will be ejected from the home and most certainly default on the loan they recieved to obtain it.
Most of the loans being made to buy a foreclosed home are to lower income earners being the homes are at half their inflated value or less. But here again we do not see the proper downpayment, credit history, steady job history,,,, being taken into account.
The bubble is being inflated again and we have yet to see the commercial market fully collapse?
Actually, we NEED to get rid of just about all of the various government agencies, because truth be known, they all cause more problems then they solve and they are costing us too much money.
On top of that, these agencies are answerable to no one and they can pass whatever laws, rules and regulations they want, and we have to obey them, even though none of us elected these people.
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