Jul 15, 2008 03:53AM GMT
Question
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Money - Investments
What is your take on the government financial bailout of Fannie Mae and Freddie Mac?
Fannie, Freddie bailout: A lifeline to the mortgage marketA government bailout of the backstops to the country's mortgage system should shore up the local housing market.
By MIKE MEYERS, Star Tribune
Last update: July 14, 2008 - 9:39 PM
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The proposed federal bailout of Fannie Mae and Freddie Mac, in the view of experts, is more likely to underpin the price of a house next month or next year than to cut the cost of a home loan next week.
Had those backstops to the country's mortgage industry been allowed to seize up, however, rising mortgage rates and tumbling house prices would have been sure to follow.
Tim Bendel, president of the Minnesota Mortgage Association, noted that with Fannie or Freddie around, 6.25 percent is a common interest rate on a 30-year fixed mortgage. "Rates without Fannie and Freddie would be 8.25 or in that range," he said.
The difference between those two interest rates on a $200,000 mortgage: $272 a month or $3,264 a year.
"We see that as a positive, confidence-building move for the mortgage market," said Wade Abed, managing partner of Lakeland Mortgage in Bloomington. "We think that will settle the market quite a bit."
White House and Federal Reserve officials have asked Congress to authorize loans to Fannie Mae and Freddie Mac and purchases of their shares to keep the two institutions solvent. The federal government created the two publicly traded companies generations ago to buy outstanding mortgages from banks and other lenders.
Worries that investors would back away from repackaged home loans sold in the secondary market by Fannie Mae and Freddie Mac led to a crisis of confidence last week.
Fannie Mae stock closed at $9.73 a share Monday, down from a weekly high of $17.62. Freddie Mac shares closed at $7.11, dropping from a weekly high of $13.46 last Wednesday. Both stocks were in the mid-$60 range in October.
Every dollar Fannie Mae or Freddie Mac pays for a mortgage acquired from banks or other home lenders represents a dollar freed for a bank or other lender to use in a new mortgage. Their operations infuse as much as $50 billion a month into the U.S. mortgage market, backing up loans not only from American financiers but from foreign investors as well.
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raves posted Oct 08, 2008 11:48PM GMT
Answered This is what I think
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Posted by The Stench... Question Stats2 answers 2 comments raves +1 Share This Question With SodaHeads By Email As a Widget StumbleUpon Reddit vote nowBuzz up! FANNIE MAE Dirt What does Daniel Mudd and Beth Wilkinson have in common??
Wonder why the press is not going after Congress for the Fannie Mae bail out??
The press is in Bed deep with these 2
David Gregory is NBC News’ Chief White House Correspondent is married to Beth Wilkinson
She just resigned her Job at Fannie Mae (3 million a year job
Daniel Mudd who got a cool 80 Million from Fannie Mae before leaving his Father just so happens to be Roger Mudd his dad
is most noted for NBC and CBS.
So while we demand hearings this is why they are falling on deaf ears
We need to kick congress in thier collective asses Time for a change folks now you can see why the press fawns over Obama they are linked to the bail out.
The rats are getting rich and not being found out.
Contact CBS/Fox/NBC/ABC/CNN/CNBC news and ask them why they are failing to report the real story
Maybe we need a little street justice -
raves +1 posted Sep 19, 2008 04:02PM GMT
Answered This is what I think
I think it needed to be done. However, isn't it ironic that when we bail out corporations it's ok, but when we help the sick or needy it's SOCIALISM? I can't wait to see how the right wingers spin this one. Maybe a little REGULATION (oh no, the dirty "R" word) in the industry isn't such a bad thing afterall! -
raves +1 posted Jul 15, 2008 03:09PM GMT (edited)
Answered This is what I think
Statement and disclaimer found on Fannie Mae's website.
July 13, 2008
Statement by Daniel H. Mudd, President and CEO
Fannie Mae appreciates today's announcements and the expressions of support for the GSEs as shareholder-owned companies that play a critical role in the U.S. housing finance system. We are grateful for the leadership of Secretary Paulson and Chairman Bernanke. We also look forward to working with Treasury, OFHEO and Congress on swift passage of the new legislative proposals, as well as the important initiatives underway to assist homeowners and help restore stability to the housing market. We continue to hold more than adequate capital reserves and maintain access to liquidity from the capital markets. Given the market turmoil, having options to access provisional sources of liquidity if needed will help to strengthen overall confidence in the market. We will continue to do our part to provide liquidity, stability and affordability to the housing market now and in the future.
Disclaimer:
This statement contains forward-looking statements, which are statements about matters that are not historical facts. Although Fannie Mae believes that the expectations set forth in these statements are reasonably based, the company's future operations and its actual perfo...Statement and disclaimer found on Fannie Mae's website.
July 13, 2008
Statement by Daniel H. Mudd, President and CEO
Fannie Mae appreciates today's announcements and the expressions of support for the GSEs as shareholder-owned companies that play a critical role in the U.S. housing finance system. We are grateful for the leadership of Secretary Paulson and Chairman Bernanke. We also look forward to working with Treasury, OFHEO and Congress on swift passage of the new legislative proposals, as well as the important initiatives underway to assist homeowners and help restore stability to the housing market. We continue to hold more than adequate capital reserves and maintain access to liquidity from the capital markets. Given the market turmoil, having options to access provisional sources of liquidity if needed will help to strengthen overall confidence in the market. We will continue to do our part to provide liquidity, stability and affordability to the housing market now and in the future.
Disclaimer:
This statement contains forward-looking statements, which are statements about matters that are not historical facts. Although Fannie Mae believes that the expectations set forth in these statements are reasonably based, the company's future operations and its actual performance may differ materially from what is indicated in the forward-looking statements in this statement. Factors that could cause actual results to differ materially from these statements include the company's results of operations for the remainder of 2008; changes in accounting principles or practices, including changes in the rules governing qualified special purpose entities; recording a valuation allowance for its deferred tax asset; continued impairments of its assets; changes in investor confidence in the company; the effect of proposed and pending legislation. Additional factors that could cause actual results to differ materially from these statements are detailed in Fannie Mae's quarterly report on Form 10-Q for the first quarter of 2008 and its annual report on Form 10-K for the year ended December 31, 2007, including in each case the "Risk Factors" section, as well as the company's reports on Form 8-K. These periodic and current reports, as well as all other forms that Fannie Mae has filed with the SEC, can also be obtained on the company's web site at www.fanniemae.com/ir/sec/.(less) -
raves +7 posted Jul 15, 2008 04:57AM GMT
Answered This is what I think
This is the type of welfare that the conservatives should be opposed to, not the socially compassionate safety net programs that save a life of a child, provide medical attention or may put some hardworking person back on there feet.
At 3.5 Trillion $ (Estimate of a Bailout, and u know that # is bogus), of course lets not mention about the 1 Trillion $ cost of that (Cost to borrow interest, administration, and service charges), we wont talk about.
What i think is every time congress requires or needs to appropriate money, they should be required to say "raise taxes" in place of "appropriate money". That may get more attention. -
raves +3 Jul 15, 2008 04:28AM GMTHow in the hell is the market suppose to correct itself out of 5 trillion dollar debt? Our congress has been paid off. And anyone who came against them were pointed out as being not for housing. Sounds familiar doesn't it. All of our enemies we just give them label and attack it make them something without a soul. Such bullshit.
Answered This is what I think
This is the type of welfare that the conservatives should be opposed to, not the socially compassionate safety net programs that save a life of a child, provide medical attention or may put some hardworking person back on there feet.At 3.5 Trillion $ (Estimate of a Bailout, and u know that # is bogus), of course lets not mention about the 1 Trillion $ cost of that (Cost to borrow interest, administration, and service charges), we wont talk about.
What i think is every time congress requires or needs to appropriate money, they should be required to say "raise taxes" in place of "appropriate money". That may get more attention.