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Fannie & Freddie

Discussion in 'Members' Lounge' started by totalburnout, Sep 7, 2008.

  1. totalburnout

    totalburnout Well-Known Member VIP

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    Recked, I owe you an apology.

    I sincerely thought that the government propping these companies up and injecting them with billions would have helped them clear the hurdle of the housing slump.

    http://www.bloomberg.com/apps/news?pid=20601103&sid=ajcw4yxxPGJ8&refer=news

    Looks as though my friend is out his $5,000 worth of shares due to insolvency or at least he will be last in line to receive his payout.
     
  2. Briansol

    Briansol Admins Admin VIP

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  3. totalburnout

    totalburnout Well-Known Member VIP

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    They screwed themselves by having to take on bad debt that was chartered into their agreement with the government.

    The majority of losses came from low income individuals that the government mandated the company take on the debt. The fault lies with both the government and the private sector.
     
  4. nootrac22

    nootrac22 Well-Known Member VIP

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    I wonder if this will open up some nice cushy government jobs?
     
  5. Sabz5150

    Sabz5150 FALCON PUNCH!!!

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    The gov't stated that they would be going through ALL the books of both companies.

    That's the stuff *I* wanna see.
     
  6. cressidakiller

    cressidakiller New Member

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    basically theses are quasi-govt companies, forced to make mortgages to ppl who can't afford them. hello sub-prime. freddie mac gave $1 mil to jesse jackson's rainbow/push for a literacy program, among other things. don't trust govt to run just about anything. usps almost always operates at a loss. libraries suck. our tax dollars not so hard at work. federal govt employs ~15% of population, biggest US employer. here in DC its really easy to tell who works for the fed govt. very hard to get fired from a fed govt job.
    I say 1-2 yrs for housing to bottom out. govt interference will lengthen it.
     
    Last edited: Sep 8, 2008
  7. reckedracing

    reckedracing TTIWWOP VIP

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    thanks for the apology
    i didn't get to read up on this latest news
    i wonder how it'll affect my house hunt
    time to do some research
     
  8. UNDR8D

    UNDR8D ...has a job!

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    This is because, in the context of government, there is no incentive to operate efficiently. In fact, there is a great DISincentive, as efficiency will yield budget surpluses. Taxpayers then wonder why they are paying so much if it is not all being used for social benefit. Therefore, most governmental programs operate at a loss, beyond their means, allowing them to push for more money year after year.

    Private business on the other hand, owes it to their shareholders to operate efficiently and maximize return on investment capital. A company that operates at a loss year after year will not have many years.

    This just goes to show you that government does operate within vacuum; a unique environment that can be found nowhere else in the world.
     
  9. cressidakiller

    cressidakiller New Member

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    oh yes, most govt has little accountability. i heard welfare-type money has 70% administrative cost. countries w/ bigger govt are usually poorer.
     
  10. Briansol

    Briansol Admins Admin VIP

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    bahaha, owned.

    FREDDIE MAC

    (NYSE: FRE)
    Real-time: 0.89 [​IMG] 4.21 (82.55%) 3:59pm ET


    nothing like an 82% loss today. lol
     
  11. Briansol

    Briansol Admins Admin VIP

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    FANNIE MAE

    (NYSE: FNM)
    Real-time: 0.70 [​IMG] 6.34 (90.07%)
     
  12. phyregod

    phyregod !!YTINASNI

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    Hold on to your asses and start eyeballing houses. Financial experts are saying mortgage rates could drop over 1%.
     
  13. Briansol

    Briansol Admins Admin VIP

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    i'm not so sure about that.

    they are already at historic lows.

    in order to drop more, the fed would have to cut interest rates again... and i simply don't see them doing that.
     
  14. phyregod

    phyregod !!YTINASNI

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    My current mortgage is at 4.25%, is fixed, 15 year, and I've had it for 5+ years. I win.
     
  15. Briansol

    Briansol Admins Admin VIP

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    you're not touching 4's on a 30-year, without buying a bunch of a points at least...
     
  16. phyregod

    phyregod !!YTINASNI

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    Wouldn't take a 30 year. Ever done the math on it?
     
  17. Briansol

    Briansol Admins Admin VIP

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    we're from different markets. around here, you aren't touching a 15 year as a first time... and probably even a 2nd time home buyer.

    i personally have a 40 year fixed.
     
  18. UNDR8D

    UNDR8D ...has a job!

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    A home is a gigantic liability.
     
  19. phyregod

    phyregod !!YTINASNI

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    Yeah. Your'e right. Its much better to live in someone else's house and pay them the rent, so instead of investing money over time, you're just tossing it out the window.
     
  20. cheese9988

    cheese9988 Senior Member VIP

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    Just bought a house at the end of June, 6.125% on a 30. fyi.
     
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