from an investor BBS ...
"-California strong-arms the mortgage industry to allow the homedebtors to keep paying the "teaser" rate on their loans {forcing the lenders / stockholders to eat the difference - sic}
-Europe regulators suspend the trading of their version of MBS
-Fannie and Freddie (stealth operators of the U.S. government) pulling delinquent loans from the pool and offering the deadbeats a workout {refi to fixed rate / writedown - sic}.
-The FDIC also putting the heat on mortgage lending industry to offer to keep teaser rates on millions of bad loans made to slackers.
-The "Super SIV" bailout of the Big Boy Banks now underway.
-The various "Save the Sheeple" acts working their way through congress. {barring banks from foreclosing etc. - sic}
-The FHLB $164 billion dollar injection of loans into Countrywide and other near-bankrupt lenders and originators (and yes, FHLB is ALSO a stealth appendage of the government)
-The Fed cranking up its acceptance of MBS as "collateral" for loans of additional electronic fiatscos {Fed window accepting toxic 'subprime' paper in exchange for dollars at face value - sic}
-The proposed "SecureLoan2" program involving the FHA to allow them to re-write more bad subprime loans into bad FHA/Ginnie backed loans.
-The various state and local programs to offer assistance to homedebtors in the form of debt moratoriums down payment assistance and even grass-cutting and maintenance services on foreclosed homes to keep property "values" up."
The $64 trillion dollar question of course is who ultimately winds up paying for these Thanksgiving 'turkey's ? The answer of course is the US taxpayer and bank stockholders.
The next question is why anybody who 'thinks like a criminal' would continue to make their mortgage payment if new federal / state laws guarantee that their house can't be foreclosed on ? Seriously, if Joe Sixpack's credit rating is already shot, what difference would it make ?
The next question is why any bank would ever write a future mortgage at anywhere near today's mortgage interest rates if new federal / state laws barring foreclosure result in future mortgages being equivalent to de-facto 'unsecured' loans. After all the banks can no longer claim the value of the house as collateral because they can't foreclose and resell it if the loan defaults ?
the last question is who in America could possibly afford to undertake a future mortgage at credit card like 'unsecured' interest rates ?
IMHO all of these 'save my house' laws will set in motion unintended consequences. While present homeowners who were allowed to buy houses in the past that they could not afford will be allowed to keep those houses indefinitely as a result of these new laws, these new laws will also virtually guarantee that anybody who does not already own a house won't be able to buy one in the future ! On the flip side, these new laws will also virtually guarantee that new and existing homes cannot be sold due to lack of qualified buyers and/or future financing.
These 'save my house' laws will ultimately cause the destruction of the homebuilding and real estate industries, as well as dealing a huge hit to banks by officially rendering the writing of future mortgages (and trading of resulting Mortgage Backed Securities) as a high risk low reward business segment. And I don't even want to think of the potential trickle-down effects on retirement funds / state-local gov't budgets ...
What the hell are these politicians thinking ? Yeah Yeah I know ... they're thinking exactly the same thing that they were thinking 10 years ago when they first mandated that HUD pressure Fannie Mae and Freddie Mac to start writing shaky mortgages to would-be 'minority' urban homeowners, and when they first mandated that banks must lend X percentage of total mortgage loan dollars for properties in urban areas that were formerly 'red-lined', regardless of the fact that the would-be homeowners involved could not actually afford these mortgages !
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