Saturday, June 29, 2013

Homepath Mortgage (Fannie Mae) - Our Housing Bubble Must Stay Plump!

Here's a nice story about how the federal government learned lessons from the bursting of the housing bubble a couple years ago.  Remember Barnie Frank and company, the progenitors of the Fannie Mae/Freddie Mac housing fiasco?  If you don't remember, scads of people were given loans for more house than they could afford.  Scads of people defaulted, bad loans (toxic assets) were sold as commodities (securities), politicians and CEOs of Fannie Mae and Freddie Mac made millions, and we taxpayers are still cleaning up the mess.

Of course, the dems blamed Bush.  The repubs blamed Barnie Frank and the dems.

Putting aside the blame game, let's take a quick look at how the federal government, and Fannie Mae, dealt with the issue.

I made an offer on a home a few days ago.  I'm a veteran, so I'm applying for a VA loan.  The VA is protective of veterans, in that they make sure the house appraises high enough to justify giving the loan.  The realtor tried to sell me on a Homepath Mortgage (backed by Fannie Mae), which does not require an appraisal at all.  That way, a person can get a loan for a house that costs more than it's worth.  In other words, Homepath and Fannie Mae are encouraging people to get houses of unknown value that are "under water" the minute you move in.

The housing bubble is alive and well.  Beware.

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