Fannie and Freddie to the Rescue?...( this kind of pisses me off)

This really bothers me because the government guaranteed loans have traditionally been there to help people of MODEST means, to buy homes.. Using government loans to guaranteed loans of almost $800,000 , bothers me..

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Fannie and Freddie to the Rescue?

BusinessWeek - Jan 25, 2008

Policymakers want to give the mortgage lenders access to the jumbo loan market, in an effort to free up credit and stimulate home sales

by Dawn Kopecki

Hoping to speed delivery of its $150 billion pick-me-up for the U.S. economy, the Bush Administration reluctantly agreed to temporarily increase the size of the mortgages Fannie Mae (FNM) and Freddie Mac (FRE) can purchase, from $417,000 to nearly double that. Proponents of the shift hope that Fannie and Freddie—which together own or guarantee about half of the $10 trillion in total home loans in the U.S.—can unfreeze the market for those "jumbo" loans and kick-start the housing market. But for a variety of reasons, Fannie and Freddie may not be in position to cure the subprime mortgage mess.

Economists and analysts agree that boosting the mortgage limit will help inject the jumbo loan market, which is under significant strain, with much-needed financing. The additional business Fannie and Freddie will generate with that financing should eventually help bring down prices and increase the availability of such loans. However, the two companies still haven't fully rebounded from the big accounting scandals that first came to light in 2003. With substantially thinner profit margins and tighter regulatory constraints, they have limited financial freedom to bail out others' bad investments.

snip....

average price of a home is over 600 thousand.

this is a crisis that hits all americans up and down the economic ladder.

and the governments job -- especially in a crisis is to help all of us.

to afford such a place, and the whole mess we are in now, is from people who cannot afford to "buy", tried to...and failed..

people who should not have been ushered into these loans to begin with.

however that's not what happened.

second there are people like me -- i don't make a lot of money -- but i've bought a home, years ago now -- and i'd like to sell and move.
can't do that -- so i'm stuck.

third people who make ''substantial'' incomes are americans too -- and just as entitled to help in a crisis as anyone else.
they've paid into the system just like every one else has.

stuff the pretzeldent's admin is thinking about. Wouldn't hold my breath, as this proposal got shot down just a month or so ago.