June 16, 2010
Who Owns All Those Loans?
Perhaps you missed the news about Fannie Mae and Freddie Mac this morning. The Washington Post describes how the once high flying companies that traded on the New York Stock Exchange for $60 a share, are now trading at or below $1 for over a year, and now are being given the financial “boot” from the NYSE.
“It’s logical,” said Keefe, Bruyette & Woods Inc. analyst Bose George. “The pretense that they were public companies didn’t make sense. They were kept around so the government could pursue its housing goals.”
The government took over the pair in September 2008 after they suffered heavy loan losses following the housing crash. So far, it’s cost $145 billion so far and is likely to be the most expensive of all the financial bailouts.”
Remember that you’re reading what’s really happening in the real estate market when you read this article. It’s the government pursuing its housing goals that have this market continuing to reel rather than heal.
Just my opinion, of course, but with Fannie and Freddie owning over half of all the mortgages in America, well, the continuing prospect of having those mortgages, and future mortgages, fashioned and managed by the Federal Government is an anxiety attack every single day.
Some advice. If you have any opportunity in the next years to tell the U.S. Government to keep their hands off subsidizing housing, then do so. It’s been just over fifty years, and the system isn’t working, hasn’t been working, nor will it work in the future if we continue to regulate a free market system.
If you’d like to start your education, then become a reader of Bloodhound Blog. You may be either a home buyer or a home seller, but all of us are citizens with an interest in seeing that the financial markets, particularly the financial interests in real estate and home ownership, are overseen by good stewards with common sense approaches.