Bailout Caps Eliminated

Written by Jim the Realtor

December 27, 2009

Hat tip to W.C. for including this article – I wanted to check this format too, where the author allows for embedding, is this readable on handhelds? I can opt for a skinnier format too:

12 Comments

  1. shadash

    Works fine on my iPhone.

    And the article really makes me sad. Government has chosen to push us into whatever debt it will require to acheive even the smallest amount of market stability.

  2. Art Eclectic

    This fits perfectly with my prediction that within 5 years the only loans the big banks will write will be ones with 20% down or higher and a near-perfect credit score. Everything else will go FHA and be underwritten by the taxpayer. I think the price-stabilizing incentives will continue under Fannie/Freddie where the gov’t can control them and keep pumping out loans to people who pose significant risk. Propping up prices is a major mission by the government and they will keep people buying houses they really can’t afford at the taxpayer expense in an attempt to put a floor under pricing.

  3. chris g

    It’s our children and grandchildren that will suffer because of these shortsighted policies.

  4. Tyrone

    Well said, Art Eclectic.

  5. james

    another attempt to throw some clothes on the emperor….

  6. doug r

    Now they just need to Federalize the “Federal Reserve” 😉

  7. Fedup with the Feds

    I still cannot honestly believe that Obama or Congress would let principal reductions be an option for anyone. No matter what anyone says about it being the only solution, a principal reduction for one equals a principal reduction for all. ie. 2 people purchase a 500K property with 5% down. One can make the payment, the other (say because spouse lost a job) can’t. Person with spouse losing a job gets a 100K (20%) principal reduction, while sucker 2 doesn’t. Can’t see it happening. What does Sucker 2 do? Default so he can get the principal reduction also.

    Then you are going to have all these other voters out here looking at the government “bailing out” joe blow. Honestly, can’t see it happening.

    Why is Joe Blow different from mega bank. Because, you, me and just about everyone out there has a bank account with one of the too big to fail. Protect my 100K CD, buy I could care less about my idiot neighbor unless I get the same bail out.

  8. Lyle

    RE #2 30 years ago it was 20% down or FHA or private mortgage insurance. Since private mortgage insurance proved to be a very bad business model as it was structured, its gone, so we just have the other 2 legs. An alternative way to get a downpayment is to do a stint in the military then you get access to the VA loan. (Which is how a lot of the WWII generation got their first house.) I really doubt a lot of new houses will be build in the next couple of years with all the vacant ones, but the rehab business can keep a lot of the subs busy.

  9. chris g

    A short sale is a type of principal reduction.

    Artificially low interest rates in the form of “mods” are free money, too.

  10. sdbri

    Captain Obvious here. The caps were removed to improve the creditworthiness of Fannie and Freddie and nothing more. But it’s the in thing for every hack and conspiracy theorist to turn everything into a grand conspiracy no matter how meaningless. Even the article admits there is no de facto change, which destroys its own argument.

  11. doug s

    WONDERFUL post, info. counts! Thx.

Klinge Realty Group - Compass

Jim Klinge
Klinge Realty Group

Are you looking for an experienced agent to help you buy or sell a home?

Contact Jim the Realtor!

CA DRE #01527365CA DRE #00873197

Pin It on Pinterest