Thursday, August 8, 2013

A Housing Crash Repeat?

These government leaders just don't learn!   Why are they setting up the American public for another taxpayer funded bailout of the housing collapse???     The housing market is booming - you say?   Well, I say it's a false representation to what's really going on.

Let's recap what Freddie Mac and Fannie Mae do for the country.  These pseudo-government agencies go to the banks, like Chase, US Bank, Wells, BofA and they say - "hey, we'll buy your loan as long as it fits within these parameters....guaranteed!"     

So Chase goes out and makes loans - pushes people into loans as much as possible, adhering to the guidelines, and sells them to these 2 pseudo-government agencies for full face value - less the fees.   Who gets the fees?   Well that's what Chase and US Bank and Wells gets for playing the game.    

So, Chase gets their money back for the loan (a process called hypothecation  and they go off to do another loan.    Fannie & Freddie don't really care if Sally or Joe Homeowner default - because they know that the government won't let them fail.   

If they get close to failing, the government will step in and bail them out just like they did  in 2008 and 2009 with all the government sponsored programs like TARP and all the other nanny-state programs that we have in this country funded by who?????  You! and ME!  and everyone else that makes a living and who pays taxes.  Of course if you're reading this and don't pay taxes, then that doesn't apply to you.   

In essence it's state sponsored homeownership.   Why do we do this?   We're just setting ourselves up for another failure once again!    And this is all sponsored by the taxpayer.  Why?   Why do we have a mandate or an entitlement for owning a house?   Other countries don't have that... like Canada for instance.  They don't have government sponsored loans.   

Are we trying to falsely build up the housing economy in hopes that it pulls the rest of the economy out of the toilet to promote an agenda for the 2016 election?  I don't know but its wrong, it won't work, and it's yet again another failure of our government leaders.   

We need to elect people to office that have business experience to effectively run this great business called the United States of America.  Otherwise the fate of Greece or Detroit will be instilled upon this great democracy.    Please consider electing people with experience not the best looking or the best orator.    We are in trouble - and we need help.