“In the wake of the government’s takeover of Fannie Mae and Freddie Mac last weekend, the 30-year fixed rate has dropped from 6.26% last Friday to 5.79%. But only buyers with a credit score of 740 of above – and a 20% down payment – can qualify for such a low rate. During the boom, borrowers only needed scores of 640 to land the lowest rates available. Even a 580 score would get them very close to the best rate.”

http://money.cnn.com/2008/09/08/real_estate/high_credit_scores_a_must/index.htm?postversion=2008091013

Hosanna.

If congress buys into it, and lets it slide, the whole lot should be dumped on the roadside, and traded in on a better model.

From what I have seen the FDIC receivership of IndyMac HAS helped borrowers – they are re-negotiating loans. While it does gall me to see a guy who was fat and happy with his 2% (while I was at 5.5) now getting bailed out when he faces a reset at 10% I also realize that it is needed. As a very conservative homeowner I would suffer if my neighborhood was filled with abandoned houses.

Also, the banks (or receivers) do better with re-negotiations. Consider: A house worth 200K with a 250K loan. If it gets refigured at 180K the bank loses 70K. If it repos and the house sits and/or gets trashed it may well liquidate at 150K or much less. Now the loss is 100K plus.

Like some things I see – it sucks but is less bad than the alternative.

However, I accept the fact that the “blame” for this mess is bi-partisan.

Face reality, however: Those who are trying to SELL homes that they can not afford, will be “helped” when someone actually BUYS their house.

Allowing Fannie and Freddie to fail would cause real estate prices to TANK nationwide.

Without avaiable credit, without financing, all realestate would suffer.

So, I disagree, saving Fannie and Freddie, as distasteful as it looks, was absolutely necessary, in order to protect the innocent.

The shareholders of Fannie and Freddie will be hurt, we are not bailing out the shareholders.

“Fascist governments nationalized key industries and made massive state investments. They also introduced price controls, wage controls”

http://en.wikipedia.org/wiki/Fascism

The sad part is that not one foreclosure is going to be forestalled, not one family will be allowed to keep their home, not one debt will be adjusted to realistic levels. Instead, The debts and bad paper will be guaranteed by the U.S. Government at a cost equal to if not greater than the Iraq war, and with money that could be used to rebuild our energy system, every rusty bridge in the nation, and every classroom. Money that could be used to put every American to work rebuilding the country. It is sick, sick, sick, and instructive, as the Democrats too are behind it. If Freddie/Fanny failed, the only people hurt would be those who bought the repackaged debt. Our meager accounts are insured, now apparently, so too, is a trillion or two in bad debt.

This can go only so far. Just remember your government has just declared war – on your children. The wonderful irony in all of this is that eventually, it will be the rich who will be fleeced to the bone to pay the debt, as they will be the only ones left with the means.

“America is more communist than China is right now,” Rogers told CNBC Europe’s “Squawk Box Europe” September 8. “You can at least have a free market in housing and a lot of other things in China. And you can see that this is welfare for the rich. This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters.”

Rogers, known for launching the Quantum Fund with left-wing heavyweight George Soros, said the bailout was not benefiting homeowners or helping average citizens improve their standing for a home mortgage.

“It’s not bailing out the homeowners who are in trouble, by the way,” Rogers said. “It’s not bailing out people who want a mortgage – it’s just bailing out financial institutions. This is not my idea of the way things are supposed to be, but if that’s what America wants, you know, it can elect people who are going to do it. I think it’s a mistake.”

The Rogers Holdings CEO had little confidence that Democratic presidential nominee Sen. Barack Obama, Ill., or Republican vice-presidential nominee, Alaska Gov. Sarah Palin, would be able to do anything to steer Fannie or Freddie on a more stable path.

“This is a big huge mess and neither one of them has a clue as to what to do next year,” Rogers said. “Bank stocks around the world are going through the roof, that’s because they’ve all been bailed out. You don’t see the homeowners in Kansas going through the roof because they’re not being bailed out.”

Rogers had previously called for Fannie and Freddie to be allowed to go bankrupt. “They should not be bailed out,” he told “Worldwide Exchange” July 15. “This is outrageous. Who are these people who are taking our money and doing this and ruining America?”

“Let the patient go bankrupt,” he said. “We have courts in America; they will be reorganized.”

Fannie Mae and Freddie Mac were “wove a mantle of invincibility” through lobbying according to a September 8 Wall Street Journal “Deal Journal” blog post. According to the Journal’s Heidi N. Moore, the mortgage giants had $170 million in lobbying bills in the past decade and spent $3.5 million on lobbying just in this year’s first quarter, spreading their largesse among 42 outside lobbying firms.

Earlier on September 8, CNBC “Mad Money” host Jim Cramer called the bailout “a homerun plan” on MSNBC’s “Morning Joe.”
http://businessandmedia.org/articles/2008/20080908171808.aspx
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–Lobbyist for a big Swiss bank that is getting its shorts eaten by said crisis.

The “firewall” between wall street and mortgage lenders was repealed.

Senator Joe Biden voted for that “change” in regulations.

Correct. And Biden was wrong.

But the bill would never have come up for a vote if the RepubliCONs hadn’t been paid to write it for the banking industry.

Look at Gramm now–lobbyist for a big Swiss bank.

When you repeal legislation passed after the object lesson of the Great Depression, you get housing prices falling as fast as they did during the Great Depression, as Krugman points out (see link above).

You mean there’s an inherent conflict of interest when you allow mega-banks to both speculate on real-estate and write loans at the same time just like they did during the 20’s leading to the Depression?

But . . . but . . . but, I thought de-regulation was ALWAYS good for the economy.

That’s what college drop-out Rush always says . . .

Both enjoyed the clout and influence of several high powered Democrats, who used the revolving door between Washington and these Federally created corporations, to advance their careers.
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Right, and NO republicans benefited from it? More Wangoboy logic. Talk about partisan.
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Franklin
Posted September 9, 2008 at 2:38 pm | Permalink

The “firewall” between wall street and mortgage lenders was repealed.

Senator Joe Biden voted for that “change” in regulations.
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Right, and NO republicans voted for it? More Wangoboy logic. Talk about partisan.

As did the Republicans.

“On April 18, 2006 home loan giant Freddie Mac was fined $3.8 million, by far the largest amount ever assessed by the Federal Election Commission, as a result of illegal campaign contributions. Much of the illegal fund raising benefited members of the House Financial Services Committee, a panel whose decisions can affect Freddie Mac. Notably, Freddie Mac held more than 40 fundraisers for House Financial Services Chairman Michael Oxley, R-Ohio.” — Wikepedia

Now will the wefu please shut up.

Senator Joe Biden voted for that “change” in regulations.

Senator John McCain did not vote for that “change” in regulations.