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What Congress' move to kill Fannie and Freddie means

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Mortgage Professional America | 26 Jun 2013, 07:00 AM Agree 0
After five years of conservatorship, a bipartisan bill has been yet again introduced to modify the housing finance system by replacing Fannie Mae and Freddie Mac
  • Bill Wilkinson | | 26 Jun 2013, 09:48 AM Agree 0
    This is an insane bill. The total conventional mortgage system is based on FNMA and FHLMC. giudlines. To pass this bill is to pull the heart out of the entire mortgage market
    system. It will become the new re-inventing
    the wheel syndrone. The entire market is based on these agency's system. Welcome back to the 1930s.
  • Calvin Chao | | 26 Jun 2013, 09:48 AM Agree 0
    "Mandate 10 percent capital, up front, ..."
    What is the 10% means? Who will pay for that?What if after mortgage pay off; refund to servicer? Refund to borrower?
  • ebutz@semperhomeloans.com | | 26 Jun 2013, 09:50 AM Agree 0
    The end of Fannie and Freddie as GSE's is what needs to happen!
  • David Leahey | | 26 Jun 2013, 09:55 AM Agree 0
    A very tall order in a 5 year period
  • frank Paredez | | 26 Jun 2013, 11:14 AM Agree 0
    If this bill passes, there will no longer be the american dream of home ownership. Rates will increase, and the first time the market goes down, the private investors will tighten up the spending, no one will be able to get cash from their homes or buy new homes. It will no longer be an advantage to buy a home, unless you pay cash. down payments will go up and less people will be able to own a home.
    Bad move, this industry improves the economy and by removing it you will forever distroy the american economy.
  • Wesley | | 26 Jun 2013, 01:16 PM Agree 0
    Why throw away the system that worked for so many for so long? Correct the problems.
  • Bill in Florida | | 09 Jul 2013, 02:38 PM Agree 0
    With all the minute-by-minute coverage of the latest "Blame Game Hearings" in DC that seem to have every politician looking to pillory everyone else for today's financial crisis I 'd like to remind folks of a few things. I seem to remember a covey of names that have been forgotten in what I have believed for years was the cornerstone of the financial behemoth we've found ourselves faced with lo these last 6 to 7 years. Though it's true there are many other ingredients baked in this cake, I believe this opened Pandora's box and let out or allowed much of what we face today. (There I go mixing my metaphors again)...

    After the Great Depression a public outcry eventually pushed congress and the senate into passing strick regulation on what had become an out of control banking industry (sound familiar?), that set limits on what business a bank was able to participate in and not. It was called the Glass-Steagall Act. It effectively limited a bank's cross sell capabilities into other nontraditional banking areas such as securities, equities, insurance sales and underwriting of various products not considered "Bank" business. It worked well for 60 years or so. Big banks were against it from the start, seeing it as a tremendous roadblock to doing business. More competition was probably beneficial in many ways, but no one set limits or put on the brakes when it was shelved by certain key politicians driven by a handful of banks and the smartest folks in the room went wild with new product development that proved to be an open sore we've been trying to heal since the bubble burst.

    I highly recommend reading the following link which is from a PBS documentary on this matter. Everyone today is in an uproar asking "How could this all happen" and this tells you exactly how it started and who many of the players were. Most of today's Great Recession could not have transpired if this law had not been put on the shelf. It was and it was a decade long party that we brokers were left to pay the tab for after the drinks went home.

    Please read this article...

    http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html
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