Coincidence that it's 30 years to the day from the first underwriting of a CRA (Community Reinvestment Act) mortgage in 1978?
It's the foreclosure process necessary to recover the collatoral that the Democrat CEO's and managers at Fannie Mae and Freddie Mac seek to avoid.
At the end of the day we still have underfunded FDIC. Like other unfunded liabilities that Representative Bachmann and other republicans are fixing,this also needs to be fixed. Paying $700 B for the absolute worse securities every investment banker has ever purchased in th last 30 years is not the solution.
At the end of the day we still have two quasi private public sector entities (GSE), Fannie and Freddie, each with a mission to serve poor people that was ill conceived. Some mortgages they create are the basis for sub-prime securities that are apparently desirable for most of their 30 year lives, but which become worthless at the end of 30 years before foreclosure. We should continue seizing each subprime-laden bank as it fails, giving custody of the bad mortgages bundled into the bad securities to small mortgage companies along with modest compensation,
liquidating the failed company according to standard bankruptcy procedure, and reimbursing the depositors through the federal FDIC or private insurance. We should worry about the solvency of the FDIC. But the last thing we should do is trust the implementation of a $700B fix to Hank Paulson, a former member of an an industry that is so honor-less they participated in the passing along of what they now say are bad securities for 30 years at inflated prices. Now they want to sell the same hot potatoes to US at an inflated price. The total cost of managing the CRA mortgages cannot be anywhere near ONE Billion dollars. But it will be much more if we allow Hank Paulson to deal with it.
It's the foreclosure process necessary to recover the collatoral that the Democrat CEO's and managers at Fannie Mae and Freddie Mac seek to avoid.
At the end of the day we still have underfunded FDIC. Like other unfunded liabilities that Representative Bachmann and other republicans are fixing,this also needs to be fixed. Paying $700 B for the absolute worse securities every investment banker has ever purchased in th last 30 years is not the solution.
At the end of the day we still have two quasi private public sector entities (GSE), Fannie and Freddie, each with a mission to serve poor people that was ill conceived. Some mortgages they create are the basis for sub-prime securities that are apparently desirable for most of their 30 year lives, but which become worthless at the end of 30 years before foreclosure. We should continue seizing each subprime-laden bank as it fails, giving custody of the bad mortgages bundled into the bad securities to small mortgage companies along with modest compensation,
liquidating the failed company according to standard bankruptcy procedure, and reimbursing the depositors through the federal FDIC or private insurance. We should worry about the solvency of the FDIC. But the last thing we should do is trust the implementation of a $700B fix to Hank Paulson, a former member of an an industry that is so honor-less they participated in the passing along of what they now say are bad securities for 30 years at inflated prices. Now they want to sell the same hot potatoes to US at an inflated price. The total cost of managing the CRA mortgages cannot be anywhere near ONE Billion dollars. But it will be much more if we allow Hank Paulson to deal with it.
Posts
