Freddie & Fannie Bailout Plan is Sure to Make Rates Rise

If you have or haven't heard, the Feds came out with a plan today to revise, change or eliminate Mortgage Giants Freddie Mac & Fannie Mae.  If you include all government mortgage entities, the US Government and US Taxpayers now do 97% of all home loans in America today.  They have effectively wiped out the private mortgage and securitization industry. Government can't do anything better that private industry can! We are currently losing Billions each quarter with these two losers.

It is estimated that the losses due to the relaxing of government lending standards in the 90's will cost the U.S. Taxpayer between $2 and $11 Trillion dollars when it's all said and done. This push into subprime lending by the outgoing Clinton Administration and Rep. Barney Frank D-NC, whose boyfriend worked high up at Fannie Mae by the way, will possibly double our National Debt! This exceeds all the bailouts of GM, Chrysler, AIG, Banks, TARP, and stimulus measures to date combined!

If you think it's hard to get a home loan now, just wait, Here are the few bullet points I gleaned from the press release this morning:

• Reduce the governments share of the mortgage industry from 90% down to 40%. (make a lot less loans)
• Raise Rates! (a lot less people can afford loans)
• Raise Credit Score Requirements (less people can qualify)
• Reject More Applications (less approvals)
• Charge Higher Closing Fees (more money to pay at closing)
• Implement a minimum of 10% Down (more skin in the game)

This will be catastrophic say the Realtor's, as less people will qualify to buy anything, and they like to sell houses! Supporters say that the private mortgage industry will come back into existence and fill the gap.  You decide. Either way, there are more bumps ahead in the road for housing and home finance.

D