Call it Crazy
Wed, 26 Dec 2012, 5:47am PST
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And, add that to this new proposal:
Refi Program Expansion Eyed
The Obama administration is considering expanding its mortgage-refinancing programs to include borrowers whose mortgages aren't backed by the government and who owe more than their homes are worth, according to people familiar with the discussions.
Such a move would benefit borrowers and provide a boost to the economy by unleashing cash that homeowners could spend elsewhere. But one proposal being considered would also transfer potentially riskier loans held by private investors into the taxpayer-supported mortgage giants Fannie Mae and Freddie Mac.
Because such a move would transfer billions of dollars of these mortgages to the government-backed mortgage companies, it would require congressional authorization to temporarily change Fannie's and Freddie's charters. Under the proposal, Fannie and Freddie would be allowed to charge higher rates to borrowers in order to compensate for the risk of guaranteeing refinanced loans that are underwater and more likely to result in default.
But industry officials say such a program would work only if banks were given immunity from having to buy back any loans they refinance that subsequently default, and that such a shield would boost the risk for the taxpayer-backed companies.
Fannie and Freddie "have already proved that they really weren't good at pricing higher-risk assets" during the housing bubble, said David Stevens, chief executive of the Mortgage Bankers Association. "What gives us the belief they can price it better today?" Allowing the firms to "reload up their balance sheets...will ultimately be a taxpayer expense," he said.
Wed, 26 Dec 2012, 5:51am PST
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Yup! He's an idiot.
It will make no difference to starts.
There is no short, medium, long term confidence in property ownership.
Perhaps it has something to do with robo-signing or chain of ownership issues!