why are e going to bail out the two largest subprime lenders?

[hate2bL8]

Why Bail them out after all they got us in this mess with thier dubious lending. Why reward bad behavior?One congressman said today do you reward the kid on the block after he breaks a window by giving him a larger bat? thoughts...(Fannie May Freddie Mac)

 

[clippyrip]

It's corporate welfare.

 

[BoilerUP]

Probably for the same reason the government bailed out Bear Stearns...if they fail, the whole house of cards that is the US financial sector will likely be close behind.

 

[BushwickBill]

Because if we dont the foundation of our economy will crumble. No loans: no construction, no development, no real estate etc.

Personally I can't wait to hunt for lunch and have my own personal fifedom. First thing I'm going to do is kill all the rich people in my neighborhood when our society falls apart.

Its happening much faster than I thought.

LOL just wait until GM falls apart. GM's retirement fund is broke. They are just letting the dance go on as long as possible.

In 8 short years our government has ruined our country.

 

[JumpJetter]

why are e going to bail out the two largest subprime lenders?

Why Bail them out after all they got us in this mess with thier dubious lending. Why reward bad behavior?One congressman said today do you reward the kid on the block after he breaks a window by giving him a larger bat? thoughts...(Fannie May Freddie Mac)

Just so you know, Fannie Mae/Freddie Mac DO NOT purchase subprime loans.

 

[hate2bL8]

yes you might be right im not an economist but i do no they lend in the secondary market(subprime) which is what got them in trouble.In adition from what I understand they are a spuedo private company that pays "0" tax go figure!!

 

[Poahi]

Remember what happened in the 80's? The interesting thing with the loan crisis is that we never learn from history. When you relax underwriting standards everything is great as long as real estate prices creep up. When adjustable loans went higher, we re-learned that there must actually be an ability to repay a loan. Don't worry, 15 years from now, the cycle will repeat itself again.

 

[zkmayo]

The two companies hold or guarantee more than $5 trillion in mortgages -- almost half of the nation's total.

Anytime youre dealing with trillions, the govt going to get involved if its shaky. Unprescedented...

 

[Thebadcat1313]

Fannie and Freddie are victims of the subprime mess to the extent that subprime loans and their defaults have lowered property values across the board. That has made the good, conservative loans that they guarantee worth less than they should be, at least temporarily. If these organizations were to fail, we'd be looking at the next great depression that would make the current situation look like a party.

 

[getonit]

Fannie and Freddie are victims of the subprime mess to the extent that subprime loans and their defaults have lowered property values across the board. That has made the good, conservative loans that they guarantee worth less than they should be, at least temporarily. If these organizations were to fail, we'd be looking at the next great depression that would make the current situation look like a party.

Something that everybody is ignoring is that property prices never should have spiraled up like they did. The people who buy in at the high end are the ones getting burned. Why should I as a person who didn't buy get stuck with the bill for paying for the greedy short sighted people?

 

[D-Bo]

Something that everybody is ignoring is that property prices never should have spiraled up like they did. The people who buy in at the high end are the ones getting burned. Why should I as a person who didn't buy get stuck with the bill for paying for the greedy short sighted people?

You're not digging deep enough. The buyers aren't the primary reason the subprime mess is going on. The problem is more complex. Just think, there are a ton of people getting very rich from this entire mess. But you have to go further than the buyer. You've got the builders, the brokers, the agents, the appraisers, and the lenders to blame before you even get to the buyer.

What happened should not be a surprise to anyone. The writing was on the wall 6 years ago. Many in this country have been fooled by the illusion of false wealth. It bought a lot of votes. Now we have this mess. Now we have folks that are more concerned in how much they pay in taxes when the real concern should be what your tax money is being spent on. Tax rate doesn't mater if it's being spent to your detriment.

This market is going to get a lot worse before it gets better. Hold on. The thing about this problem is that there is no single catalyst to bring us out of it.

 

[Thebadcat1313]

Something that everybody is ignoring is that property prices never should have spiraled up like they did. The people who buy in at the high end are the ones getting burned. Why should I as a person who didn't buy get stuck with the bill for paying for the greedy short sighted people?

I don't disagree with you. Unfortunately, it was the hedge funds, pension funds, etc who made lots of easy money available to buy homes a few years ago. The same folks who are now speculating oil through the roof. Property prices climbed in response to easy credit. If you were conservative and got a loan you could afford, you should be fine. But the ramifications of Freddie and Fannie going broke are almost unfathomable.

 

[cjdriver]

Something that everybody is ignoring is that property prices never should have spiraled up like they did. The people who buy in at the high end are the ones getting burned. Why should I as a person who didn't buy get stuck with the bill for paying for the greedy short sighted people?

Because the majority of voters elected our current gov't.

 

[skyboat]

yes you might be right im not an economist but i do no they lend in the secondary market(subprime) which is what got them in trouble.In adition from what I understand they are a spuedo private company that pays "0" tax go figure!!

You are incorrect. Fannie/Freddie do not lend in the secondary market. They sell in the secondary market. The secondary market is nothing more than the market that enables non primary dealers and brokers to participate in the marketplace. The primary market allows companies to sell equity and debt to primary brokers and dealers, usually as part of a syndicate. The secondary market allows the primary dealers to sell to individuals and institutions (like you and me).

Fannie/Freddie have never, and will never, buy subprime or alt A debt. They are not able to even purchase jumbo loans. Fannie/Freddie buys prime loans, securitizes the loans, and then sells them in the secondaty market. Additionally, they will guarantee the debt through the purchase of insurance on the debt they securitize.

 

[BoilerUP]

IndyMac did all the Alt-A loans...