Quote:
Originally Posted by Snake Doctor
Limiting the amoung of paper Fannie and Freddie could hold would only limit the number of people who could own homes. It wouldn't have done anything to prevent the current crisis we're in.
Fannie and Freddie had to be taken over because they couldn't raise enough capital to continue buying mortgages from other lending institutions....they basically suffered from the same credit crunch that's crippling the rest of the economy right now.
Unless you can show me where in McCain's proposed bill down payments would have been required for mortgages or proof of income and assets would have been required for mortgages or how it would have regulated CDO's and CDS's so that we could know what they're actually worth, then nothing in his bill could have prevented this crisis.
|
Thats kind of the crux of the problem, no? People getting mortgages that had no business applying for one in the first place.
The bill would have reined in Fannie and Freddie and their capacity to buy this junk thus decreasing the amount that companies such as countrywide would have been able to offer. With less easy money on the street companies would have tightened up their requirements leading to fewer supprime mortgages. It probably wouldn't have completely averted the problems we see now but it would have made them much smaller.
Anyways, your whole system for giving people mortgages in the U.S. is B.S.
You should make people put money down when buying a home. If they don't have 20% they should have to take out mortgage insurance like we do in Canada.
These LTV100%+, interest only, no income, no employment, 40 year term mortgages that companies were allowed to sell with the backing of Fannie and Freddie were a recipe for disaster.
Why are people surprised that Dem's have their finger prints all over this mess just like the Repubs? They are well known for believing it is your god given right to own a home and like to force companies to lend to low income individuals.