Obama Will Force Banks To Write More Bad Mortgages

The Obama Heist Team is planning to write more bad mortgage loans. Massively more subprime loans.

You will be on the hook. The entire economy will again be on the hook, for ACORN affordable home loans.

It seems you weren’t entirely destroyed by the last government foray into dictating home mortgage procedures. Pardon Obama. Obama and his “God Damn America” preacher certainly intended your destruction.

Government doesn’t understand business, but Obama sure recognizes the jugular vein of a free market economy when he sees it.

This subprime round should finish the job on you.

Yes; Obama is still doing bailouts. We bailed them out a year ago; now we’ll bail them out again; and they will continue to write bad subprime mortgages.

The worst history will repeat, because Obama is only a second grade student of history.

Fannie Mae bailout could cost less than expected

Fannie Mae is asking for less money from the government, a sign that the cost to taxpayers for bailing out the mortgage giant could be billions lower than once thought.

The government-controlled mortgage buyer said Thursday it has now set aside enough money to cover the majority of losses stemming from bad loans made from 2005 through 2008.

It requested $1.5 billion in additional taxpayer aid after posting the best quarterly results since the company was put under federal control in September 2008. It was also the smallest quarterly request for assistance since November 2008.

Analysts, however, cautioned that the company’s financial picture could still weaken. Anthony Sanders, a finance professor at George Mason University, said the numbers are artificially low because of the slow pace of the foreclosure process.

“These foreclosures are gathering up,” Sanders said. “The dam is going to break eventually.”

Fannie Mae said Thursday that it lost $3.13 billion, or 55 cents per share, in the April-to-June period. The company’s losses take into account $1.9 billion in dividends paid to the Treasury Department. They compare with a loss of $15.2 billion, or $2.67 a share, in the quarter a year ago.

“Across our industry, we are seeing a more realistic approach to housing and lending that bodes well for the future,” Mike Williams, the company’s chief executive, said in a statement. The company said loans made last year are faring slightly better than those made during 2001 through 2004, before the company lowered its lending standards.

The government rescued Fannie Mae and sibling company Freddie Mac from the brink of failure nearly two years ago. The new request means they have needed $146.4 billion to stay afloat.

Fannie and Freddie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion. They buy home loans from lenders, package them into bonds with a guarantee against default and sell them to investors.

During the housing boom, Fannie and Freddie faced political pressure to expand homeownership and competitive pressure from Wall Street to back ever-riskier loans. When the market went bust, defaults and foreclosures piled up, and the government had to take them over.

There were some encouraging signs among Fannie Mae’s borrowers. As of the end of June, about 5 percent of the company’s borrowers had missed at least three months of mortgage payments. That’s down from 5.4 percent at the end of 2009 but still up from 3.9 percent at the end of last year.

Fannie Mae had $218.2 billion in bad loans at the end of June, up only slightly from $216.5 billion at the end of last year. It owned more than 129,000 foreclosed properties, up from nearly 110,000 at the end of April.

Some analysts doubt that company has turned a corner. Once mortgage modifications made under the federal government’s $75 billion homeowner assistance start to go bad, Fannie Mae will start to be hit with increased losses.

“They’re putting a rosy picture on it,” said Edward Pinto, a housing consultant who served as Fannie’s chief credit officer in the late 1980s. “Basically they’re kicking the can down the road on these modifications.”

Edward DeMarco, the government’s chief regulator of the two companies, said in interview last week that the total cost to taxpayers for rescuing Fannie and Freddie should be less than $400 billion. That’s under most economic scenarios, he said.

Over the next year, lawmakers plan to review the entire system for providing mortgages to Americans. That could include a dramatic overhaul of Fannie and Freddie, or ultimately their elimination.


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