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What happens to housing if Freddie and Fannie go away?


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2011 Mar 3, 2:45pm   2,375 views  4 comments

by MarkInSF   ➕follow (0)   💰tip   ignore  

http://www.nytimes.com/2011/03/04/business/04housing.html?pagewanted=1&_r=1

Interest rates would rise for most borrowers...

Life without Fannie and Freddie is the rare goal shared by the Obama administration and House Republicans...

One prominent investor, William H. Gross, the co-head of Pimco, the major bond investment firm, has estimated that he would demand a premium of three percentage points to buy such loans — a cost that would be passed on to the borrower.....

Fannie and Freddie also make ownership more affordable by allowing borrowers to repay loans with fixed-interest rates over an unusually long period....The 30-year loan first became broadly available by an act of Congress in 1954 and, from then until now, the vast majority of such loans have been issued only with government support. ...

... such loans are not available in most countries. ....

This is all bullish for housing, right?

#housing

Comments 1 - 4 of 4        Search these comments

1   bob2356   2011 Mar 3, 11:34pm  

William H Gross is probably the most shameless person alive in terms of sucking up for government money and favors while denigrating "government interference" in the free market. I'm not sure how creditable you can find his statements on this.

2   Katy Perry   2011 Mar 3, 11:48pm  

housing prices drop further as loan requirements become tighter.

3   MarkInSF   2011 Mar 4, 4:12am  

bob2356 says

William H Gross is probably the most shameless person alive in terms of sucking up for government money and favors while denigrating “government interference” in the free market. I’m not sure how creditable you can find his statements on this.

Any alleged favors from the government are a completely distinct issue from his understanding of the bond market. There aren't many people alive that know it as well as him.

4   FortWayne   2011 Mar 4, 6:13am  

there is an article on the front of patrick.net from NYTimes. "30 year mortgages will go away".

That could be a very good thing potentially.

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