Bloomberg.com: Worldwide
The stimulus package passed congress, not surprising... but I'm getting an odd feeling about the cap increase of jumbo mortgages:
Quote:
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Fannie Mae and Freddie Mac, the government-sponsored mortgage finance companies, will be allowed to buy loans worth as much as $729,750 for loans made between July 31, 2007, and Dec. 31, 2008, an increase over the current $417,000 loan limit. The move may help struggling homeowners refinance large mortgages at a lower interest rate. It will also allow the Federal Housing Administration to insure loans as high as $729,750 in expensive markets.
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Won't that just prevent the massively inflated prices from correcting? Evidently banks aren't backing this anymore, so it's left to the government to take over.
RGE - Editor's Pick: The Effective Nationalization of the U.S. Mortgage Market in Q3 07 Quote:
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The pace of mortgage production barely slowed right through the credit crisis. But the financing of mortgage production shifted in a dramatic fashion. Private label securitisation imploded, leaving government sponsored enterprises the buyers (or financial intermediaries) of last resort. The mortgage market was effectively nationalised in Q3.
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Can someone explain what's happening on that graph? Is the green line privately backed mortgages, the blue one government backed? If so, shouldn't this be the headline on the news right now? I mean, if that comes crashing down, nobody cares about the $160bn stimulus package - that's going to be a loss in the trillion range. I don't know much about real estate, but anytime graphs make such a big correction, I am worried... maybe people are just too busy figuring out how to spend their $600 to notice?
