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Genesis Posts: 71430 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/1301-H....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-08-06 10:38:37
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Clumsygardener Posts: 57 Incept: 2009-07-17
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Quote:IF the economy is truly improving then it is time for the market to recognize proper pricing for houses and mortgage money.Aye! There's the rub.
2009-08-06 10:46:06
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Spartacus Posts: 152 Incept: 2007-11-08
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Well now that you've let it known what should be done, we can surely count on the gubmint to do the opposite. Bailout Nation.
2009-08-06 10:46:15
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Andrew123 Posts: 107 Incept: 2009-07-05 California
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Genesis, I hate to keep pestering, but on top of the expected expansion of the cash for clunkers program, there is an amendment being offered by a Republican Senator to expand the housing credit to $15k and make it good through August of 2010, and Representaticve Mcdermott, Cahirman of House Ways and Means, has introduced legislation to extend and expand unemployment benifits. If Congress is willing to give people enough moeny, they will be able to pay off their debts and resume purchasing. It may destroy the dollar (against what, I am not sure), but why do you think Congress will show any restraint on these issues? Why do you believe that they will show any restraint at all on spending? It seems to me that TPTB have cast their lot and gone all in. Why are you still certain their won't be a dollar crash and rising commodity prices?
2009-08-06 10:59:30
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Andrew123 Posts: 107 Incept: 2009-07-05 California
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I know that this will all end badly, but I just don't see any reason to be confident about the dollar.
2009-08-06 11:03:09
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Salukitrader Posts: 185 Incept: 2008-03-03 Carbondale, IL
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If .gov is going to backstop all this crap, then I guess the trade is to hold your nose and go long **** like CIT, AIG, MBI, FNM, and FRE.
2009-08-06 11:07:41
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Striker754 Posts: 142 Incept: 2009-07-09
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I want to know how Raines and Mozilo are not in jail. Simply ridiculous. How can you finance stock buybacks with debt issuance all while selling your own shares?!?!?!?!
2009-08-06 11:22:03
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Throxxofvron Posts: 2672 Incept: 2009-02-17 
The Land of Bilk & Money
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Time is growing short to Ring Fence .gov. Preserve Capitalism: let Those that invested take Their profit -or loss. The Big Pump cannot last forever... ---------- DIONYSUS: " Thou hast no knowledge of the life thou art leading; thy very existence is now a mystery to thee. " -from 'The Bacchantes' By Euripides “During times of universal deceit, telling the truth becomes a revolutionary act.” -George Orwell
2009-08-06 11:22:05
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Berkleyreindeer Posts: 560 Incept: 2008-07-22 Minneapolis , MN
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saluki: if the trade is to take all this crap onto the balance sheet, the trade is to use some beer money on gov't default swaps. If a few of those widen to where Gen thinks there is a realistic accounting of our nation's balance sheet, you can sell those and move to a small island nation with the profit. think of it as an insurance policy Can we start calling washington DC, Budapest on Potomac? ---------- It'll get worse. Just wait. Last modified:
2009-08-06 11:23:29 by berkleyreindeer
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Genesis Posts: 71430 Incept: 2007-06-26
KD^2
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There is extreme danger in that approach - if it results in a ramp in the bond market yields you will get relentlessly skull****ed. So far it hasn't happened but there is a breaking point for all such strategies such as the government is employing. Exactly where it is may not be possible to determine in advance, but that there IS such a point is not disputable - it most certainly does. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-08-06 11:22:13
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Icanhasbailout Posts: 2170 Incept: 2009-03-10
Imaginationland
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There's nothing a government is good at like making a bad situation worse. Maybe when this is all over we can all have a beer at Obama's. ---------- I can has TARP? http://icanhastarp.com
2009-08-06 11:30:14
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Themortgagedude Posts: 3930 Incept: 2007-12-17 
saint louis
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Gen You're proposing there to eliminate both FHA and VA loans. You'll kill housing and as such kill the banks which we have spent so much money to keep afloat. I like the idea of cutting Fannie and Freddie loose. Cram the debt down to equity and let them recapitalize. I would guess at that point new issues of debt could be sold by them for MBS. Probably would require 10% down rather than 20% in order to sell it. In conjunction with this I would propose expanding Ginnie's FHA guidelines to include purchase loan transactions over the median limit up to the current Fannie limit at 10% down. I would lower the current FHA guidelines for maximum loan amount to exactly the median. I am in the camp that says homeownership is good but I don't think we should subsidize people who are buying a home which is nicer than the average house. Starter homes at 3.5% down I can live with. ---------- "These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!"
2009-08-06 11:30:21
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Icanhasbailout Posts: 2170 Incept: 2009-03-10
Imaginationland
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I'm pretty sure both housing and the banks are already dead... just the walking dead with taxpayer juice animating them. All gov-sponsored home loans do, in the net, is push up home prices. Gov't doesn't belong in that business. ---------- I can has TARP? http://icanhastarp.com
2009-08-06 11:33:01
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Genesis Posts: 71430 Incept: 2007-06-26
KD^2
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TMD, I'm ok with the VA loan program. I recognize they have higher-than-usual default rates but the MIP is there and further, we do owe our vets. I'm cool with it. FHA is another matter. 3% down is bull****. Its even worse as a "Starter Home" since the people buying those have limited or no reserves and earnings capacity is low. Anything goes wrong, they're ****ed. "Promoting home ownership" is bull****. Home ownership is for those who can demonstrate the financial stability necessary to stomach not only the monthly nut but also the reserves to survive adverse circumstances in their life. Those circumstances DO COME, and when you rent you're far more able to absorb them (e.g. move on short notice to a different locale.) ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-08-06 11:34:05
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Trappped Posts: 73 Incept: 2009-02-13 Banned
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"We are quickly reaching the end of our rope as "bailout nation." Guys, it's obvious what the end game is. The bought and paid for CONgress and the Elite (Paulson, Buffet, Goldman VP's, etc...) will not stop until the American tax payer is dead and buried, exumed, and ****d agin. By the time J6P figures it out and starts rioting, the above mentioned will be enroute to some secret Island on a fleet of those $200 M private jets CONgress just bought laughing all the way while doing coke and getting blow jobs by the CNBC babes. Last modified:
2009-08-06 11:49:01 by trappped
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Wontbackdown Posts: 2163 Incept: 2007-09-20
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Check this out, NAMA property Scheme.. Look how stupid this is? http://www.nama.ie/ http://www.nama.ie/Publications/2009/NAM.... How will NAMA work in practice? "NAMA will buy loans from the participating banks – these loans will be from the riskiest part of the bank portfolios. This will take these riskier loan classes away from the balance sheets of the banks concerned and make the banks safer and more secure for depositors and investors. NAMA will pay the banks concerned for these loans on the basis of valuations carried out by experts and in accordance with pre-defined methodology subject to approval of the EU Commission. The bank’s book value of the loans will not be a factor and the banks will have to recognise a loss on their books at the time of the transfer. This payment process will ease pressures on the banks arising from the tighter liquidity conditions that have prevailed for the past year or so, giving them access to cash or near-cash assets in place of the much less liquid property loan assets they had before. Again, this will make for more stable and secure financial institutions, better able to lend and support the domestic economy NAMA will then manage these loans so as to obtain the best achievable return from them. In the meanwhile, it will collect interest due and pursue debts so as to ensure its own income stream and to recoup the Government investment over time. NAMA in effect puts itself in the place of the bank that originated the loan, and will have all the same rights to pursue debts, where necessary. Borrowers who continue to meet their contractual obligations, of course, have no reason to worry – their rights are fully protected" Here is the best part about what these clowns are at.. "Valuations by NAMA will be consistent with EU Commission guidelines and will be based on the current market value of the underlying collateral, adjusted to reflect a longer term economic value which the underlying asset could reasonably be expected to attain" About as clear as ****. Haircuts of 20-30% are being thrown around.. Last modified:
2009-08-06 12:50:50 by wontbackdown
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Barberry Posts: 110 Incept: 2008-06-21
connecticut
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Karl: Ginnie Mae doesn't make loans. They can't do what you propose. Only another government agency, like HUD (FHA), can pick up the slack you're looking for. Ginnie Mae guarantees the timely payment of principal and interest of loans insured by HUD, RHS, VA. These other agencies are responsible for the underwriting guidelines of these loan insurance programs. http://ginniemae.gov/about/about.asp?Sec.... "Who we are. What we do. Why it makes a difference. At Ginnie Mae, we help make affordable housing a reality for millions of low- and moderate-income households across America by channeling global capital into the nation's housing markets. Specifically, the Ginnie Mae guaranty allows mortgage lenders to obtain a better price for their mortgage loans in the secondary market. The lenders can then use the proceeds to make new mortgage loans available. Ginnie Mae does not buy or sell loans or issue mortgage-backed securities (MBS). Therefore, Ginnie Mae's balance sheet doesn't use derivatives to hedge or carry long term debt. What Ginnie Mae does is guarantee investors the timely payment of principal and interest on MBS backed by federally insured or guaranteed loans — mainly loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). Other guarantors or issuers of loans eligible as collateral for Ginnie Mae MBS include the Department of Agriculture's Rural Housing Service (RHS) and the Department of Housing and Urban Development's Office of Public and Indian Housing (PIH). Ginnie Mae securities are the only MBS to carry the full faith and credit guaranty of the United States government, which means that even in difficult times an investment in Ginnie Mae MBS is one of the safest an investor can make."
2009-08-06 14:27:41
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Genesis Posts: 71430 Incept: 2007-06-26
KD^2
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Ginnie sells pass-through certificates just like Fannie and Freddie. There is no material difference. The funding would come from the private sector but they would provide the wrapper, and that wrapper would be provided ONLY to fully-documented, 36% DTI, 20% CASH down firsts - no exception. As fully-guaranteed (FF&C) certificates these would have an extremely low spread to Treasuries (~50bps or so) and be golden - but there would be no more bull**** games. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-08-06 14:31:05
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Barberry Posts: 110 Incept: 2008-06-21
connecticut
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Ginnie doesn't sell the certificates. When I place a HUD-insured loan to the Street or any other investor, they are buying ginnie mae securities backed by that loan which is insured by HUD or the Dept of Agriculture Rural Housing Service (RHS). The investors buy the securities, not Ginnie Mae. Most investors then package those securities into GNMA REMIC trusts. GNMA receives .13% servicing fee per annum for its wrap. This money goes to the general Treasury. It doesn't stay in GNMA. GNMA gets involved when a loan defaults or becomes delinquent. The servicer has the right to pull the loan out of the GNMA. Then the servicer can work it out with HUD, but the investor is paid off by the servicer. If the loan doesn't get pulled out of the GNMA, it is assigned to HUD or HUD can make a partial payment of claims. GNMA continues to make payments of P&I to the investor during the assignment process. One caveat: my expertise is in multifamily properties. I have been to the GNMA offices on numerous occasions. I met with the President of GNMA last spring, in fact. This agency does not have the staff or resources to become a "new" Fannie Mae. And the email addresses for ginnie mae folk are "@HUD.gov". You should make your recommendations to Shaun Donovan, the HUD secretary. GNMA will wrap any loan insured by HUD. Last modified:
2009-08-06 14:51:24 by barberry
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Genesis Posts: 71430 Incept: 2007-06-26
KD^2
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That's what I said - Ginnie provides a wrap - an effective guarantee. And I'm quite aware they do not have the staff or facilities. That can be fixed, and it would be a BETTER fix than ****ing with Fannie and Freddie. Cut the existing larcenous *******s off and let them DIE, then issue SOUND wraps through Ginnie. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-08-06 14:53:35
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Barberry Posts: 110 Incept: 2008-06-21
connecticut
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But then all new home loans/refis have to be insured by HUD, RHS, or VA. A change in underwriting standards for single family programs will have to be enacted by Congress. Are you really prepared to get Congress to limit all home loans to your ratios? I'm not disagreeing with your notion that it's prudent lending, but HUD is the "(lender) of last resort" by way of its insurance. And I do think 3% down programs have worked well in the past for first time homebuyers. Someone else knows a lot more about HUD/FHA single family loan originations. I am not an expert. Maybe they can provide information on those programs. I cannot. A loan cannot be wrapped by GNMA unless it's insured under another government housing program. The fact that it was originated under Fannie or Freddie standards disqualifies it unless it meets the underwriting standards of HUD. Last modified:
2009-08-06 15:05:34 by barberry
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Genesis Posts: 71430 Incept: 2007-06-26
KD^2
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The 3% down programs have always had high default rates. I believe there is an argument for making them for VA, but not otherwise. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-08-06 15:05:33
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Barberry Posts: 110 Incept: 2008-06-21
connecticut
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Still, the point is you have to get Congress to vote to change HUD's underwriting criteria for single family loans. It's hard enough to get a regulatory change through HUD. But a statutory change? It'll take a miracle.
2009-08-06 15:10:50
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Genesis Posts: 71430 Incept: 2007-06-26
KD^2
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If Lockart's departure is an indicator of an imminent "boom" in Fannie and Freddie they will have no choice. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-08-06 15:11:46
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Barberry Posts: 110 Incept: 2008-06-21
connecticut
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RTC? Or is that the bad bank idea they're floating?
2009-08-06 15:18:54
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