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Administration Declares GSE Model "Dead", Increases Down Payment Requirements, Sends Gold To Highs Of Week

Tyler Durden's picture


As the Treasury releases its long-awaited GSE report on "Reforming America's Housing Finance Market" the one asset class that moved is gold. The reason: D.C. proposes, very tentatively, to decrease the role of the government in GSEs, as rumored previously, considering that the banks would love to get an ever greater piece of the securitized GSE action. Not helping is the soundbite from the administration: ""The GSE model is dead," an Obama administration official
told reporters as the Treasury Department released a
long-awaited report on options to revamp housing reform.
As Reuters reports: "The housing "white paper" presents three different visions for replacing mortgage finance giants Fannie Mae and Freddie Mac, which are set to be slowly wound down. The paper does not make a single recommendation, but broadly outlines alternative possibilities to reduce the government's role in the mortgage market. That strategy aims to "open a dialogue with Republicans that would lead to a consensus outcome within a couple of years," said Michael Barr, a professor at the University of Michigan and a former Treasury Department official." In other words, just like the findings of the president's commission on the deficit, this paper will be glossed over by a bunch of beltway politicians and then promptly forgotten as whatever the banking lobby wishes to happen behind the scenes, happens. As for actionable proposals, the paper core recommendation is "increased guarantee fee pricing, increased down payment requirements, and other measures – to bring private capital back into the mortgage market and reduce taxpayer risk."

More from Reuters:

Texas Representative Jeb Hensarling wants to eliminate Fannie Mae and Freddie Mac within five years, allowing the private sector to take over the government role.

The fourth highest ranking House Republican has not yet formally introduced his bill to do that, and it is unclear when he might do so.

Democrats are generally more supportive of a government role in the mortgage market and argue that removing the federal backstop for mortgages would make loans more expensive and price many middle class Americans out of home ownership.

"I want to make sure the window of opportunity for home ownership isn't closing for the next generation of homeowners," said John Taylor, chief executive of the National Community Reinvestment Coalition, an association of community-based groups that promote access to basic banking services for working families.

The housing industry, including real estate agents, homebuilders and mortgage bankers is also supportive of some government role for backstopping mortgages and have already started pushing back against some of the most aggressive privatization proposals.

And after skimming the report, the key findings are: "We recommend FHFA employ a number of policy levers – including increased guarantee fee pricing, increased down payment requirements, and other measures – to bring private capital back into the mortgage market and reduce taxpayer risk. As the market improves and Fannie Mae and Freddie Mac are wound down, it should be clear that the government is committed to ensuring that Fannie Mae and Freddie Mac have sufficient capital to perform under any guarantees issued now or in the future and the ability to meet any of their debt obligations."

It is therefore not surprising that gold has just gotten spooked: after all if this is not just more boilerplate material, the great GSE deconservatorship process has begun. But don't worry: GSE reform won't be completed for many years, and certainly not before the next major financial crisis wipes out the entire securitization market out for good. In other words - more taxpayer money spent to pretend we are changing the status quo, when doing anything but.

Gold, which is at the highs of the week:

Full report - link.



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Fri, 02/11/2011 - 09:57 | 952429 papaswamp
papaswamp's picture

Oh yea so many will qualify with those amazing part time jobs. 

Fri, 02/11/2011 - 11:00 | 952594 financeguru500
financeguru500's picture

You won't need a loan once the prices of homes drop down to where they really should be.

Fri, 02/11/2011 - 11:01 | 952596 financeguru500
financeguru500's picture

Did I say YOU. I meant to say "Investors from other countries".

Fri, 02/11/2011 - 11:45 | 952734 TruthInSunshine
TruthInSunshine's picture

Good luck to all!

If FHA financing goes away and/OR anything more than the now 3% on a FHA loan is required, the housing market and, more broadly, the economy, is TOAST.

Think I'm exaggerating? If so, you don't know how the modern real estate market is staying alive, even if barely.

And if you think this approach on housing, which isn't the rapidly depreciating (until recently) and consumable product that automobiles are, will be limited to housing, think again.

Go back to 20% or even 15% down mortgages, conventional, and we'll see housing sales plunge far deeper than they have.

This is literally the shot across the bow.

Fri, 02/11/2011 - 11:57 | 952768 unununium
unununium's picture

There can be no surer sign that mortgage interest rates are heading higher, than the government getting out of the business.

Bloomberg carries a story today in which Jamie Dimon trashes the GSEs.  He must have forgotten the WAMU trash he's sitting on.

I think you meant this is figuratively a shot across the bow.

Fri, 02/11/2011 - 13:05 | 953119 TruthInSunshine
TruthInSunshine's picture

I meant literal 'shot across the bow,' as millions of homes will be good for nothing more than target/range sessions.

Sat, 02/12/2011 - 03:48 | 955381 Kobe Beef
Kobe Beef's picture

Good. Let's see that they are fairly priced then.

Government meddling in price discovery fails again. Long live the free market!

Fri, 02/11/2011 - 13:23 | 953216 trav7777
trav7777's picture

I'm forced to agree; without the effective subsidy that the GSEs provided to the housing market, we're looking at probably another 20% decline at a minimum.  The presence of a size buyer basically willing to take losses fluffed prices up far more than warranted.

Fri, 02/11/2011 - 09:59 | 952431 Xibalba
Xibalba's picture

Not to worry.  JPM is on the way!

Fri, 02/11/2011 - 10:06 | 952445 Xibalba
Xibalba's picture

from 8:59 to 9:05 silver just dropped .22 cents.  Blythe enters stage right. 

Fri, 02/11/2011 - 10:09 | 952452 bankrupt JPM bu...
bankrupt JPM buy silver's picture

Blythe just hit the sell algo's, you fuckin wench

Fri, 02/11/2011 - 10:11 | 952460 Xibalba
Xibalba's picture

You've got option expiry today in the paper SLV.  What will the 'custodian' do?

Fri, 02/11/2011 - 10:25 | 952492 In Fed We Trust
In Fed We Trust's picture

As  I was saying yesterday "The GSE model is Dead."

But the way they said it on NPR was that the "Government footprint in the mortgage market was to big" and steps had/were being taken to bring in private money.

Amazing how the President gets briefed the same day on the subject as I do!

This of course is just getting the law/paper work out of the way.

Let houses collaspe for another 2 years or 20 % decline , and that private money

money should start showing up form Goldman and JP Morgan to snatch up some steals in the GSE market.

Like I said, in the end the FED will own a large percent of all the homes in the US.

thru it's affilate members of course. "They Reluctently had to step in" will be Benarke's words.

The pistol in Bernake's hand is the interest rate.


Fri, 02/11/2011 - 11:08 | 952610 In Fed We Trust
In Fed We Trust's picture

I dont understand why this issue of the FED being the biggest landlord is never talked about on this site?

Isn't it true, that the FED with an increasing share of the GSE market (the biggest stake) and growing , will place this into private money at sometime in the future.

Private hands,  just means JP Morgan and Goldman Sachs. Houses should continue to drop in price , allowing for the fed to acquire a few million more units before the big garage sale.

Now home prices are 30-40% of their peak, as the FED sells its inventory to JP Morgan, Goldman Sachs, at a bargain price.  Seeing how these banks are part of the FED, they are really selling the houses to themselves!

Bernake can can rasie rates at any time and force millions more into foreclosure.

Will are dealing with the biggest baddest landlord of all time,

So, even though the GSE might be worthless, toxic, at the bottom of the bag are actually physicla homes, several million.



Fri, 02/11/2011 - 11:11 | 952619 In Fed We Trust
In Fed We Trust's picture

Ok I think I might of answered my own question.

During times of hyperinflation the price of realestate, is pegged.

So the group, controling the real estate and ownership of such are the winners at the end of the hyperinflation.

Meet the new boss. Same as the old boss...

Fri, 02/11/2011 - 11:48 | 952739 wisefool
wisefool's picture

Keepers of the "perks" i.e. McMansions, and the ability to leverage them in a post-modern "MTV cribs" world.

..... And people say religious types are morons reading obsolete books.

Fri, 02/11/2011 - 13:27 | 953234 trav7777
trav7777's picture

well, the income tax wasn't enough apparently.  I guess they figure by owning all the mortgages, they'll get their money back

Fri, 02/11/2011 - 22:44 | 954978 GreenSideUp
GreenSideUp's picture

I dont understand why this issue of the FED being the biggest landlord is never talked about on this site?

I've actually thought about this a bit, and tried to contemplate what the end game might be.   No matter what, it won't be pretty, and it certainly won't benefit Main Street. 

Fri, 02/11/2011 - 09:59 | 952432 monopoly
monopoly's picture

Nothing will come of this. The banks will not allow it and they run our govt.

Fri, 02/11/2011 - 10:02 | 952437 dick cheneys ghost
dick cheneys ghost's picture

lock stock and barrel. banks will never accept private losses. the taxpayer must be responsible for all loss.

Fri, 02/11/2011 - 10:16 | 952470 KickIce
KickIce's picture

Yeah, the Fed has already purchased much of this garbage at the bubble prices.  My guess is the banks will get to buy it back at the current value and the taxpayer will eat the difference.  Disgusting.

Fri, 02/11/2011 - 10:26 | 952486 plocequ1
plocequ1's picture

Taxpayers are becomming scarce. If you are unemployed , and alot of them i may add, and living in your car, How does one pay taxes?

Fri, 02/11/2011 - 11:03 | 952604 Rodent Freikorps
Rodent Freikorps's picture

Sales tax will still get you. At least that is local.

Fri, 02/11/2011 - 11:25 | 952661 plocequ1
plocequ1's picture

Thank you. I have to admit, I am getting a little worried

Fri, 02/11/2011 - 14:31 | 953525 JLee2027
JLee2027's picture

It's all going to collapse, and quite suddenly at some point. Buy and hold physical silver. 

Fri, 02/11/2011 - 11:10 | 952605 Agent P
Agent P's picture

Well, unemployment benefits are considered taxable income.  That is moot however, considering that roughly 45% of Americans end up with zero (or negative) federal tax liability.  This is not a recent phenomenon's an article from 2006 (peak of the "good times") showing the number at 41%.  If you don't like/trust the source, there are plenty of others out there.

I'm guessing some of the increase has to do with what you're describing, but some also has to be attributable to the additional tax credits recently enacted (lifetime learning credit, etc.).  Point is, there have always been plenty of free riders on the bus.

Fri, 02/11/2011 - 12:20 | 952891 KickIce
KickIce's picture

My guess, once they get control of all the assets, land in particular, they'll just convert to a digital currency.

Fri, 02/11/2011 - 10:30 | 952506 Rodent Freikorps
Rodent Freikorps's picture

I'm not paying for this.

That is going to be my war band's motto. After the Zombpocalypse, of course.

Fri, 02/11/2011 - 10:56 | 952585 In Fed We Trust
In Fed We Trust's picture

GSE reform won't be completed for many years, and certainly not before the next major financial crisis wipes out the entire securitization market out for good. In other words - more taxpayer money spent to pretend we are changing the status quo, when doing anything but.

Dear Tyler,

Anything coming out of DC with the word "reform" in it really means "new fraud"

Deep in these bs bills of reform, are the future tracks, and legal framework

that allows for legal future theft of assets that are in question. Meaning:

So i read your above piece, not only is this a pretend bill, but it the bill are the exact assets that they want to steal and when they want to steal them, and the reform laws that give them the advantage, or right out steal.

Fri, 02/11/2011 - 11:31 | 952682 Don Birnam
Don Birnam's picture

<< Anything coming out of DC with the word "reform" in it really means "new fraud" >>

Absolutely so; akin to the periodic economic bulls issued by the old Soviet Presidium -- and, in the end, likely just as resultant.

Fri, 02/11/2011 - 09:59 | 952433 Cognitive Dissonance
Cognitive Dissonance's picture

Just another example of the USA talking it's book in order to maintain (or prevent from plunging) it's financial credibility. There is no way to exit from the Mexican standoff. While they talk of reducing risk, that's all it is, talk. They fully understand that they must actually rush more people into the fight in order to keep the collapse at bay.

As Todd Harrison said back in 2008, they sold the car crash and bought the cancer. We are now seeing the effects of not only the cancer as it eats away at the body, but we are seeing what the chemo is doing to the immune system. The only thing remarkable about all this is the amount of abuse the body can take before it collapses into a bowl of quivering jelly.

Fri, 02/11/2011 - 10:00 | 952435 ColonelCooper
ColonelCooper's picture


Fri, 02/11/2011 - 10:11 | 952459 SheepDog-One
SheepDog-One's picture

Yep CD or in somewhat more laymans term theyre all full of crap! 'The amount of abuse the body can take'...hell theyre just in denial claiming the 100% life support terminal patient will soon be running the Boston Marathon...DENIAL is not a river in Egypt, central planners!

Fri, 02/11/2011 - 10:35 | 952512 DaveyJones
DaveyJones's picture

"The GSE model is dead!" Ironic Mr. President since the only financial institutions left standing are the ones that are "government sponsored." 

Fri, 02/11/2011 - 10:47 | 952551 Cognitive Dissonance
Cognitive Dissonance's picture

Does this mean "we the people" are sponsoring the government?

Unless we say "no" (and back that no up) we are in effect saying "yes" to everything the government is doing and saying. BTW it stopped being "my" government well over a decade ago. But even though I reject the present government as not acting for me or in my interests I'm still responsible for making an effort to stop this madness just like the Egyptian people are finally recognizing their own responsibility to stop the madness over there.  

Fri, 02/11/2011 - 11:22 | 952647 Agent P
Agent P's picture

Silence is acceptance.  You are correct sir.

Fri, 02/11/2011 - 11:24 | 952658 DaveyJones
DaveyJones's picture

those in the know know its all about backing up the no

Fri, 02/11/2011 - 10:57 | 952590 In Fed We Trust
In Fed We Trust's picture

You know my pain.

Fri, 02/11/2011 - 10:02 | 952436 eigenvalue
eigenvalue's picture

I think China will be screwed more than the US when the 2 GSEs finally default on their obligations. 

Fri, 02/11/2011 - 10:13 | 952462 SheepDog-One
SheepDog-One's picture

China cares less if theyre screwed, they can write off a couple billion unarmed peasants, what do they care? Here, they  know when TSHTF theres about 100 million armed americans at least that can wreak a whole lot of havoc.

Fri, 02/11/2011 - 10:16 | 952471 Rodent Freikorps
Rodent Freikorps's picture

Marcus Antonius:
And Caesar's spirit, raging for revenge,
With Ate by his side come hot from hell,
Shall in these confines with a monarch's voice
Cry "Havoc!" and let slip the dogs of war,
That this foul deed shall smell above the earth
With carrion men, groaning for burial.

Julius Caesar Act 3, scene 1, 270–275

Fri, 02/11/2011 - 10:29 | 952501 redarrow
redarrow's picture

No. China is not screwed, they have a lot of our manufacturing assets, they are good at reverse engineering. So if the US says, FU to china, they will reply FUT by taking ownership of all those factories and telling the Apples, P&G's of the world to shove it.

So we will end up exchanging GSE/Treasury debt for factories. Ain't life a bitch?

Fri, 02/11/2011 - 10:37 | 952521 SheepDog-One
SheepDog-One's picture

I dont see how people figure China is screwed. What do they care? Theyve got most of our manufacturing, and would hardly care about a billion less Chinese peasants. 

China already has us by the nuts anyway, and Obama just made the deal for 500 Chinese cities here in the US anyway. No americans say a word about it, ignorance is bliss!

Fri, 02/11/2011 - 11:17 | 952632 Dr_Dazed
Dr_Dazed's picture

500 "Chinese" cities to be set up in the US?  Now where'd that tin foil hat go?

Fri, 02/11/2011 - 12:53 | 953054 TruthInSunshine
TruthInSunshine's picture

No. China is not screwed, they have a lot of our manufacturing assets, they are good at reverse engineering.

I do not have personal animus towards the Chinese People, but - their leaders are not our friends, they have malice-saturated intentions, and the gap between their much-touted 'skills' and the reality of their ability to innovate or engineer is vast.

They have, however, edited 'Top Gun' footage and used it in an attempt to pass off the incredible capabilities of their new J-20 'stealth' fighter jet:


China uses Top Gun scene in its stealth fighter jet video
Fri, 02/11/2011 - 13:33 | 953273 trav7777
trav7777's picture

the article said "J10," which is incidentally a reverse-engineered Lavi.  Or else the israelis sold them the design.

the only things built well in china are in western factories.  Anything local is a counterfeit, cheap, and shoddy.

Sat, 02/12/2011 - 01:47 | 955261 TruthInSunshine
TruthInSunshine's picture


I know a highly skilled machinist who works for a boutique precision CNC shop that 'reworks' and fixes industrial machine parts.

90% of his work involves fixing bastardized Chinese parts, outsourced due to low cost, that are sent back stateside, because they are literally so out of spec that they won't even fit on their intended equipment.

He told me that it would be significantly less expensive and much more efficient to just craft these parts here to begin with, even at much higher original prices, as the things would get produced properly 99.99% of the time to begin with.

He jokes about it, but in an almost sad manner, because he knows that this insane loop is benefitting both him (he makes over $70/hour, non-overtime - he pulls 50% more than that with overtime hours- , but he is highly skilled) and his company, but he also knows that if this insanity isn't reversed, the Chinese probably will improve with time.

As an aside, this guy is so skilled, he reproduces out of production motor parts for older gen VW motors and Benz diesels (his employer allows him to use their equipment in his off time; the price of retaining a brilliant employee, I guess. And yes, he's an American of German heritage).

Fri, 02/11/2011 - 10:14 | 952464 Sudden Debt
Sudden Debt's picture


even the ugly chicks.

Fri, 02/11/2011 - 10:18 | 952474 Rodent Freikorps
Rodent Freikorps's picture

What's your point? Sounds like any bar at last call.

Fri, 02/11/2011 - 10:44 | 952540 kridkrid
kridkrid's picture

thank god for ugly chicks.

"I hope, you got... fat.  I hope, you got, really fat.  Cause if you got really, really fat, you just might want to see me come back... I hope you got... FAT"

Fri, 02/11/2011 - 10:16 | 952469 Lets Hang Parliament
Lets Hang Parliament's picture

That's why they are pretending to do something as they are scared shitless about the Chinese response if it all goes tits up...

Fri, 02/11/2011 - 10:39 | 952527 SheepDog-One
SheepDog-One's picture

Bunch of desperate 'Lets make it look like we've got things under control' nonsense in a full implosion.

Fri, 02/11/2011 - 10:03 | 952438 Founders Keeper
Founders Keeper's picture

[That strategy aims to "open a dialogue with Republicans that would lead to a consensus outcome within a couple of years," said Michael Barr, a professor at the University of Michigan and a former Treasury Department official."]---TD

These are not the cash-for-closures bailout droids you are looking for. Move along.


Fri, 02/11/2011 - 10:04 | 952439 Temporalist
Temporalist's picture

Perhaps there are additional reasons gold is going up:

International Monetary Fund director Dominique Strauss-Kahn calls for new world currency


"Strauss-Kahn saw a greater role for the IMF's Special Drawing Rights, which is currently composed of the dollar, sterling, euro and yen, over time but said it will take a great deal of international cooperation to make that work."

Fri, 02/11/2011 - 10:13 | 952463 Rodent Freikorps
Rodent Freikorps's picture

It'll be called the Tard.

Fri, 02/11/2011 - 10:27 | 952497 johnQpublic
johnQpublic's picture

it will be called 'dyes'


as the dollar quaint


i'd really like to know how they intend to 'wind down' a trillion in bullshit mortgage debt out of fannie/freddie

"price many middle class Americans out of home ownership"


they tried that in Cali already, i believe,with million dollar two bed homes

a little further fall in the value of the dollar and the average McD's worker will be able to pay cash for his house( foreclosures section) but need a payday loan to buy food and gas

Fri, 02/11/2011 - 11:44 | 952732 bronzie
bronzie's picture

"how they intend to 'wind down' a trillion in bullshit mortgage debt out of fannie/freddie"

$1.6 trillion in acknowledged debt at Fannie and Freddie with total exposure (ie, potential losses) between $5 trillion and $6 trillion - as the housing crash continues the losses at Fannie and Freddie will climb

removing govt support from the GSEs will accelerate the housing crash since the GSEs create 95%+ of the current mortgage market

"Fannie Mae and Freddie Mac have exposed taxpayers to $5.4 trillion in risk from loan guarantees"

Fri, 02/11/2011 - 12:01 | 952782 Lets Hang Parliament
Lets Hang Parliament's picture

"WC" = world currency - easy to flush....along with the other fiat toilet paper.

NB you cant flush gold

Fri, 02/11/2011 - 10:16 | 952467 SheepDog-One
SheepDog-One's picture

Wow so all us 'conspiracy kooks' saying its all about bringing it all back up into their dream 1 world govt 1 currency cashless society arent looking so kooky anymore.

Fri, 02/11/2011 - 10:49 | 952561 kridkrid
kridkrid's picture

Amazing, no?  I wish I had recorded conversations between myself and ____________ (too many to list) over the past 15-20 years.  Though even as this unfolds, they will still look at me as if I'm crazy.  They will have their 3 or 4 memes to provide the "logic" behind this.

Fri, 02/11/2011 - 10:04 | 952442 Camtender
Camtender's picture

"wind down" Fannie & Freddie - can that mean anything other than close?


Also, reduce portfolio 10% per year, sell off loans to other entities?

Fri, 02/11/2011 - 10:05 | 952443 titansforever
titansforever's picture

And now they want to transfer the interest income to the banks and let the people backstop the loans. Nothing new here. If the government wants to run healthcare why does it not want to run the banks? Seems to me we could be saving a lot of bonus and income if we just formally nationalized the banks and shut down the casino.

Fri, 02/11/2011 - 12:21 | 952903 AbandonShip
AbandonShip's picture

Agree, (commercial) banks should just be treated like a Utility.  They just provide money to people that is given to them by the government (us), they produce nothing.  Their income/profits should be capped just like any other utility (water, electricity, etc.).  I like the Credit Union model in particular.

We could still have a category for Investment banks or other type of complex financial services (insurance, etc.) so those behaviors (RISKS!!!) can be kept separated (Glass-Steagall? <gasp>).  And don't reply with that "we tried it and the banks went around it" crap or the other line "banking clients need a one-stop-shop for all their financial needs".  No they don't, they can go to more than one place for their financial needs.  Do you go to one place for your groceries and haircut?  No, you don't.  You go to different places and the world keeps turning.

Fri, 02/11/2011 - 10:05 | 952444 Implicit simplicit
Implicit simplicit's picture

They are getting ready to legally subsidize the banks, and make TBTF mandated. The heart of the diseased system lies here.


GSE Headfake: Yet More Looting Branded as “Reform”


Fri, 02/11/2011 - 10:06 | 952446 SheepDog-One
SheepDog-One's picture

Capital will never form in banks as corrupt as these! 

Fri, 02/11/2011 - 10:09 | 952455 Josh Randall
Josh Randall's picture

Silver establishing that nice support for a Big Bottom at $ 30 --- upwards and onwards from there


Fri, 02/11/2011 - 10:15 | 952456 Temporalist
Temporalist's picture

Mubarak has left Cairo...

Mubarak Flees Cairo for Sharm el-Sheikh

Fri, 02/11/2011 - 10:21 | 952480 Fearless Rick
Fearless Rick's picture

Next step is occupation of the palace. Storm the gates. El Presidente is no en casa, amigos!

When that happens, it's game over. Muba will never return once the palace is soiled by commoners.

Fri, 02/11/2011 - 10:24 | 952487 Temporalist
Temporalist's picture

"Egyptian leader Hosni Mubarak has left Cairo, according to reports on Friday. A western official told The New York Times that the government is signaling that Mubarak has handed over all power. The Egyptian Armed Forces issued a statement that the military was in effective control of the country -- not Mubarak."

Fri, 02/11/2011 - 10:43 | 952538 Josh Randall
Josh Randall's picture

ZH community should pass the hat and offer 100K of The Bernake Bucks to the first Egyptian commoner to drop a DEUCE in the Heliopolis commode

Fri, 02/11/2011 - 11:35 | 952696 Bastiat
Bastiat's picture

In the commode?  How polite!

Fri, 02/11/2011 - 10:16 | 952466 Nepenthe
Nepenthe's picture

Hmm, the treasury is proposing something that would ultimately lead to higher interest rates...

Don't watch the other hand.


How long until housing bottoms if this gets some backing?

Fri, 02/11/2011 - 10:18 | 952475 SheepDog-One
SheepDog-One's picture

Higher interest rates...should work great for unemployed bankrupt america!

Fri, 02/11/2011 - 10:31 | 952507 Nepenthe
Nepenthe's picture

Exactly and it wouldn't be benny the bernank raising rates, it would be the 'free market.' 

Fri, 02/11/2011 - 10:18 | 952476 Xibalba
Xibalba's picture

Housing bottoms when the average man can buy one at less than his income.  Right now people are paying more for that home than they make. bottom in sight. 

Fri, 02/11/2011 - 10:37 | 952520 Nepenthe
Nepenthe's picture

But with (per timmay this a.m.) larger down payment requirements and higher fees to close, that should make purchasing easier, right???

The report should have read-

Dear Komrade Homeowner,

Please bend over. Just a little more, little more, that's it.





Fri, 02/11/2011 - 11:21 | 952641 wisefool
wisefool's picture

Bad Cop. Good cop. They will make it "harder" to buy a house by taking away the GSE crutch. But by 2012 they will get votes using some type of "powered wheelchair" framework so people can zip around the housing/tax code casino faster. The banks will be fine and the government will keep thier jobs stirring the pot.

Never forget that policy in this country is run by a bunch of C students in Psychology, Communications and Finance. Countries like china and India are run by Engineers and Historians.

Fri, 02/11/2011 - 10:17 | 952472 Fearless Rick
Fearless Rick's picture

The report constantly mentions "affordable" housing for "low and moderate income" families, specifically promoting more multi-family units (construction of rentals) and assistance to targeted groups.

Here comes a false urban housing boom and more subsidies for the poor, benefiting the rich. Middle class, as usual, is kept out of the equation and told to "eat cake and like it."

The system is rigged to make the rich richer, the poor poorer and the middle class slaves to both.

Fri, 02/11/2011 - 10:20 | 952479 SheepDog-One
SheepDog-One's picture

'Affordable housing' all a bunch of central planner commie gobledeegook. America is bankrupted, and no one can afford anything. Get the jobs back to america, make the banks and govt default, enough bubble blowing BS.

Fri, 02/11/2011 - 10:23 | 952485 Rodent Freikorps
Rodent Freikorps's picture

Lather, rinse, repeat.

It helps to have a dumbed down electorate, educated by a federal Education (cough-Bullshit-cough) Dept.

Fri, 02/11/2011 - 10:48 | 952552 wisefool
wisefool's picture

+1. Mission accomplished. now we do the rebuilding which will be much more expensive.

During the 1990s the big proponents of the community re-investment act like John Edwards kept thumping the "We all must live together" drum. In Europe, they did the intense muticultural thing. Both initiatives had good motives but were so heavy handed, like war, they destroyed more than they created good.

Now the country is even more bankrupt. We overbuilt housing at the expense of prime, contiguous agricutural land. We trained a huge ammount of people to be homebuilders, sales people and financiers.  Many of these people are now out of work and on the UI roles. We may all be living together but we have no jobs and are going to be paying more for food.

And as you mentioned, the government is now going to do what they should have done in the first place, rebuild the infrastructure of existing communities. Meanwhile, the rich like John Edwards and Dodd get to keep thier McCastles they built on/with GSE funded dollars, when they had plenty of money to do it themselves.

William Wordsworth : And homeless near a thousand homes I stood, And near a thousand tables pined and wanted food.


Fri, 02/11/2011 - 13:23 | 953212 Zero Govt
Zero Govt's picture

Not at all Fearless rick.

The problem pumping cheap credit into the bottom end of housing is it lifts prices right up the scale. The unintended consequences of political actions. So people on say $250,000 incomes instead of affording a $500k house escalated to $700k or $1m homes.

It made debt slaves of everyone in the sector, not just the sub-primes. And the politicians should be hung for it 

Fri, 02/11/2011 - 10:19 | 952478 Dr. Richard Head
Dr. Richard Head's picture

So if GSEs are dead, then I would assume Freddie won't be able to lay a lien on my mortgage that they purchased from the originating back just one week after I signed my mortgage, which they also refused to record at the County Recorders' Office? 

Why is it that all of the fuss with MERS not documenting transfer of ownership with mortgages, but Freddie Mac gets a free pass from the press on their neglecting state laws?

Either way, I will post the response from the bank President on my request for them to satisfy the mortgage and remove their lien since the originating bank was compensated in full for my mortgage.  The bank President's assistant called to tell me that a response is on the way to my inquiry. 

Fri, 02/11/2011 - 10:42 | 952534 johnQpublic
johnQpublic's picture

like to know how that goes down....i refied with wells fargo and they sold it to fannie within a week also


how did you find out they didnt record with county?

Fri, 02/11/2011 - 11:10 | 952608 Dr. Richard Head
Dr. Richard Head's picture

First, I went to the County Recorders' Office for the county my home resides, actually I called them.  Then I asked them for all records as it relates to the note and the deed, as well as any documents related to any transfers.  Nothing in the records indicate ANY transfer of ownership.   

I then went on to send a request for the note to my lender, along with all transfers.  Their reponse indicated that the mortgage was sold and NOT recorded.

Here is a copy of the certified letter I sent to the bank on January 18, 2011.  Just two days ago I received a call from the Assistant to the President of the bank stating, "You will receive a written response to your letter within a week."  Mention of satisfying the mortgage was made as well.  We will see and I will post when available.  Below is the letter.

On October 14, 2010, a qualified written request under Section 6 of the Real Estate Settlement Procedures Act (RESPA) was sent to the attention of FIFTH THIRD BANK.  In response to the inquiry, two different departments within FIFTH THIRD BANK have indicated opposing views as it relates to holder of the mortgage.  One response indicates that FIFTH THIRD BANK is currently the holder of the mortgage and no assignments of the mortgage had taken place regarding the above reference property.  This response was received within 60 days of the aforementioned request.  In late December of 2010, a second response indicates an alleged assignment to FEDERAL HOME LONE MORTGAGE, as well as written confirmation that no recording of the assignment had taken place - The transfer of ownership is NOT (emphasis mine) recorded so that Fifth Third Bank can continue to service your loan under a servicing agreement with the investor. 


This latter response is indicative of the recent widespread failure of securitization industry participants to adhere to statutory law.  For example, Ohio Revise Code requires that an assignment must be in writing and recorded.  A mortgage may be assigned or partially released by the holder of the mortgage, by writing the assignment or partial release on the original mortgage or upon the margin of the record of the original mortgage and signing it. Also allowed by separate instrument, see code sections 5301.31 and 5301.32.  A search of documents at the County Recorder Office, as well as a search of the documents FIFTH THIRD BANK presented in response to the RESPA request indicates no such required recording of the assignment on the original mortgage or through any separate instruments.


While it is understandable that lenders, or holders of mortgages or deeds of trust, often assign mortgages or deeds of trust to other lenders, or third parties, appropriate documentation must be provided and recorded in order for the investor to take place of the original lien holder.  To effectuate an assignment, the general rules is that the assignment must be in proper written format and recorded to provide notice of the assignment.

Once a mortgage or deed of trust is paid, the holder of the mortgage is required to satisfy the mortgage or deed of trust of record to show that the mortgage or deed of trust is no longer a lien on the property. The rule is that the satisfaction must be in proper written format and recorded to provide notice of the satisfaction.  If the lender fails to record a satisfaction within set time limits, the lender may be responsible for damages set by statute for failure to timely cancel the lien.

There is no document in the record establishing that either the note or the mortgage was assigned to FEDERAL HOME LOAN MORTGAGE, hence no legal documentation to indicate that the note was assigned. If, as the RESPA response indicates, FEDERAL HOME LOAN MORTGAGE is the investor on this mortgage and FIFTH THIRD BANK is not the holder of the note, then there is no basis for the claim of continued receipt of the borrowers payments. As such, FIFTH THIRD BANK would not be considered a creditor of this debtor and lacks statutory authority to file a proof of claim on this property.

This letter is a formal written request for a Satisfaction of Mortgage so as to remove FIFTH THIRD BANK from the lien position on the mortgage.  Please also provide an accounting of all payments paid to the investor listed in the response to the October 14, 2010 RESPA request.




Dr. Richard Head

Fri, 02/11/2011 - 11:40 | 952713 Apply Force
Apply Force's picture

Very interesting - Thanks for posting.

I sent a note demand and chain of title request to Chase bank mid-Novemeber 2010 and never received a reply.  Nothing.

Original mortgage with WaMu, and "transfered" multiple times between then and now Chase.

I have received multiple no-cost refinancing offers from Chase since the request, at the lowest fixed APR available... I am more confident now that they do not have the note.

Next step...?  Quit paying first or first try to negotiate a principal cram-down on their part to assign a new (proper) mortgage?  Opinions appreciated...

Fri, 02/11/2011 - 12:22 | 952908 Dr. Richard Head
Dr. Richard Head's picture

I'd file for quite title (my next step depending on response from 5/3 President), but Chase is now in violation of RESPA rules (not that they give a shit).  The bank is required by law to respond to all qualified written requests according to Section 6 of RESPA -

And required to satisfy request within 90. 

Fri, 02/11/2011 - 12:38 | 952998 Apply Force
Apply Force's picture


Gathering all of the "paper" ammo that I can.  I'll look into quiet title, too. 

Fri, 02/11/2011 - 12:47 | 953038 Dr. Richard Head
Dr. Richard Head's picture

No problem.  It is the least I can do for the ZeroHeadge community. I have to pay back Zerohedge for helping me to become the loon that I have become.  No 401K, hoarding physcial silver and gold, challenging every loan I have ever taken, calling congress critters to smash them on their kronyism, petition initiative drives, to a great chain-smoking and drinking habit.  I couldn't have done it without you guys.

Krishnamurti: “It is no measure of health to be well adjusted to a profoundly sick society.”
Fri, 02/11/2011 - 13:02 | 953107 TruthInSunshine
TruthInSunshine's picture

Without getting into specifics, let me steer some of you to:


Utah's "Quiet Title Law" Bypasses MERS, Awards Homes Free & Clear


Fri, 02/11/2011 - 13:08 | 953142 ghostfaceinvestah
ghostfaceinvestah's picture

The fact that you got refi offers after submitting that request is proof positive they don't have your note.

I would consult a lawyer about what to do next, or maybe check the website, there are some good forums there, maybe someone there can advise you.

Fri, 02/11/2011 - 11:40 | 952715 Janice
Janice's picture

Inquiring minds want to know......what is your state of residence?

Fri, 02/11/2011 - 11:44 | 952733 Apply Force
Apply Force's picture

I think he's in Ohio - same as me.

Fri, 02/11/2011 - 12:24 | 952917 Dr. Richard Head
Dr. Richard Head's picture

Ohio indeed.  Here is a great resource for documentation requirements as they relate to each state -

Fri, 02/11/2011 - 12:26 | 952932 Dr. Richard Head
Dr. Richard Head's picture

By the way, I am not an attorney.  I am just a lowly sales person and on am the board of our private company.  Thanks to Zerohedge I have been on a quest to source case law as it relates to this and the Utah case quite title was me inspiration after the Show Me the Note campaign.  I don't know if I am 100% right or not, but signs are pointing to yes. 

Fri, 02/11/2011 - 10:24 | 952484 praps
praps's picture

"As the market improves"

huge assumption there - presumably based on, well, it always has in the past

Who says it's not going to get worse and worse for another 10 years. The baby boomers have all bought, creating the housing bubble in the first place, and the earlier ones in the wave are starting to sell. There's no-one behind them to buy - not at these prices.

Fri, 02/11/2011 - 11:49 | 952746 bronzie
bronzie's picture

"Who says it's not going to get worse and worse for another 10 years."

Martin Armstrong's cycle work says that the current downtrend in housing will bottom in 2032 which is another 21 years ...

Fri, 02/11/2011 - 13:08 | 953105 Zero Govt
Zero Govt's picture

I think Martin Armstrong's wrong on the 2032 bottom, this sector already started its 2nd wave down in about Sept' won't hold up that long, more like a 2015 bottom as this is the big collapse starting that'll make 2006 look like the warm-up act

Fri, 02/11/2011 - 10:24 | 952488 bunkermeatheadp...
bunkermeatheadprogeny's picture

Back stops and guarantees huh?

Man, I need to bring Uncle Sam with me to the casino.

Fri, 02/11/2011 - 10:26 | 952491 blind squirrel
blind squirrel's picture

Govt's three options:

1. George Bailey

2 Mr. Potter

3 George Bailey and every shows up at his Christmas party with a couple small bills in time of crisis.

Fri, 02/11/2011 - 10:27 | 952496 chinaguy
chinaguy's picture

China's response comes in 3, 2, 1...

Remember they already front ran this report saying they should underweight GSE paper a few days ago....

Fri, 02/11/2011 - 10:40 | 952510 Mercury
Mercury's picture

"The GSE model is dead"

Big deal -  the GE model (without the 'S') is growing like fucking housing and everything else.

Fannie and Freddie used to be "government sponsered", now they (and all the crap they own) are the government.

Fri, 02/11/2011 - 10:40 | 952531 Rodent Freikorps
Rodent Freikorps's picture


Fri, 02/11/2011 - 10:48 | 952532 Zero Govt
Zero Govt's picture

Any plans to hold to account the Democrat and Republican politicians and crones of Fanny and Freddy that have made US property a total fuking bomb site?

Any mention of the Govt retards and their fuking political mangling that CAUSED  this mess, misery and spun the entire US property market into a Govt caused hyper-bubble??

Any chance Barny Frank and Chris Dodd GO TO JAIL for the $100's of Billions of taxpayers money pissed down the toilet for their abject incompetence if not corruption???

The BIGGEST FARCE/FUK-UP/STINK in world property in history gets wiped under the carpet with not a SINGLE POLITICIAN in that toilet called Washington HELD RESPONSIBLE???????????

Fri, 02/11/2011 - 10:45 | 952544 buzzsaw99
buzzsaw99's picture

The GSE model is dead.

My ass. The GSE model is to subsidise and bail out the banks. The GSE model is alive and well with QE2 flip that bond and other programs which write checks directly to the jp morgue holding company. To quote Shakespeare:

A bailout by any other name would smell as rank...

Fri, 02/11/2011 - 10:47 | 952547 Bastiat
Bastiat's picture

Any chance Barny Frank and Chris Dodd GO TO JAIL for the $100's of Billions of taxpayers money pissed down the toilet for their abject incompetence if not corruption???


Almost none.

Fri, 02/11/2011 - 10:49 | 952554 Zero Govt
Zero Govt's picture

Yep, says it all...... get me a nail-gun, we need it for the nails in the coffin of Govt

Fri, 02/11/2011 - 10:48 | 952553 Catullus
Catullus's picture

Assbag academic proposes giant nothingburger of reforms. Hinting that the model is dead and there needs to be a reach out to the republicans should be the DC equivalent of discrediting Barney frank. But alas, memories are short

Fri, 02/11/2011 - 10:50 | 952563 Ancona
Ancona's picture

Since the GSE's have been dead for years, they must have smelled the rotting corpses.

Fri, 02/11/2011 - 10:52 | 952574 BennyBoy
BennyBoy's picture

Dustbin of History, meet:

Reforming America's Housing Finance Market

Fri, 02/11/2011 - 11:29 | 952627 virgilcaine
virgilcaine's picture

The financing part of GSE is dead , but the losses will go on forever.  Like you giving an unlimited Amex card to bangdaeho and you getting the bill each month.

The Gov decided to backstop the debt , step into the Tar pit, now they want out of the Tar pit.

Fri, 02/11/2011 - 11:53 | 952758 bronzie
bronzie's picture

"The financing part of GSE is dead , but the losses will go on forever."

that's right - Fannie and Freddie have guaranteed between $5 trillion and $6 trillion in loans - the US taxpayer will eat huge losses from these guarantees

and, the GSEs currently guarantee 95%+ of all mortgages originated so removing them from the market means the market becomes non-existent

the housing crash accelerates dramatically if the GSEs are really removed from the game

Fri, 02/11/2011 - 15:05 | 953632 ToddGak
ToddGak's picture

Yeah, I don't get this.  They think private banks will suddenly step up and start handing out $500K loans to people?  Without that support, prices plummet...which would be a good thing for renters and those not planning to sell their homes anytime soon...but would screw the bankers, MBS investors and the house flippers.  So, not gonna happen.

Fri, 02/11/2011 - 11:17 | 952631 Life of Illusion
Life of Illusion's picture

Nothing more than a guarantee to insurance companies to jack fees.  Fees and a government guarantees so originators can sell loans off to private capital and have no risk. Same abuse that got us in trouble in the first place.  This is a privatization program with taxpayers still on the hook.

Have an absolute public auction and sell all inventories on the books and stop interfering with mark to market.  Prices would drop and affordable housing would be available to low income housing. Private capital would purchase paper if priced at market without government guarantees.


Fri, 02/11/2011 - 11:24 | 952655 Snidley Whipsnae
Snidley Whipsnae's picture

Eventually we go back to the model of home finance that existed prior to the demise of capitalism in the US circa 1930... re; either pay cash or secure a ~5 year balloon mortgage from your community bank. The gov has no business in the home finance biz...or, any finance biz including backstopping tbtf banks.

And the Fed is off the hook because they recently passed a new rule that allows them to dump all losses on the doorstep of the US Treasury... that would be us.

Slightly off topic... here is a good one from Jesse...

"Financialization Era – how banking welfare captured our economy and ravaged the wealth of the working and middle class. Building profits through financial debt leverage."

Fri, 02/11/2011 - 12:00 | 952778 bronzie
bronzie's picture

"Eventually we go back to the model of home finance that existed prior to the demise of capitalism in the US circa 1930"

some analysts claim that most of the increase in housing prices since the 1960's has come BECAUSE of the govt's intervention - all of the govt's meddling in an attempt to make housing affordable has actually caused housing prices to become un-affordable

Fannie and Freddie are supposed to be programs to help low income people purchase housing - the current max loan from Fannie in 'high-cost' areas is $729K - what kind of low-income people are buying houses for $729K???

and there has been discussion inre raising the cap above $900K!!! $900K for low-income housing!!!

Fri, 02/11/2011 - 12:40 | 953007 AbandonShip
AbandonShip's picture

Can someone please, PLEASE post the report that shows how increasing Home Ownership has these amazing magical benefits ("positive externalities" for you Macro pin-heads) that JUSTIFY THE ASSOCIATED RISKS?    Seriously, a regression output would be fine.


It's clearly a fraud.  People simply need a place to live.  They can rent, they don't need to own.  This whole "affordable housing" garbage was just a way for crooked politicians and their dirty banking buddies to line their pockets.

Fri, 02/11/2011 - 13:48 | 953341 ghostfaceinvestah
ghostfaceinvestah's picture

"all of the govt's meddling in an attempt to make housing affordable has actually caused housing prices to become un-affordable"


yup, no different with student loans/education - the easier it is to finance with debt, the more expensive it becomes.

actually, same could be said for our whole economy.

Fri, 02/11/2011 - 14:20 | 953486 topcallingtroll
topcallingtroll's picture

don't forget how health care costs exploded after the start of medicare and medicaid.

Fri, 02/11/2011 - 11:33 | 952686 bronzie
bronzie's picture

"The GSE model is dead,"

since the GSEs currently guarantee 95%+ of the mortgages originated, isn't this the same as saying, "the mortgage model is dead", which is the same as saying, "the housing market is dead"?

Fri, 02/11/2011 - 12:54 | 953075 TruthInSunshine
TruthInSunshine's picture


Short, sweet and spot-on analysis.

Let's see if they roll out another derby pig to replace the old one, and how she looks (aka will the sow be wearing lipstick AND mascara?).

Fri, 02/11/2011 - 11:54 | 952764 Life of Illusion
Life of Illusion's picture

Here’s who benefits.

James B. Lockhart III assumed the position of Vice Chairman of WL Ross & Co. LLC in September 2009. WL Ross manages $9 billion of private equity investments, a hedge fund and a Mortgage Recovery Fund. It is a subsidiary of Invesco, a Fortune 500 investment management firm.[1] As Vice Chairman, Lockhart coordinates WL Ross’ investments in financial services firms and mortgages.

For the prior 7 1/2 years, he served in the US Government in a series of Presidential-appointed, Senate-confirmed positions. He was the Director (CEO) and Chairman of the Oversight Board of the Federal Housing Finance Agency (FHFA), the regulator of Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. He assumed that position with the signing of the Housing and Economic Recovery Act on July 30, 2008. He was the Director of the Office of Federal Housing Enterprise Oversight (OFHEO), which is now part of FHFA. He was nominated to that position by President George W. Bush, a friend of his from prep school, college and business school,[2] and confirmed by the United States Senate in June 2006.

He also served on the Financial Stability Oversight Board from its inception in 2008. This board was set up to oversee the Troubled Asset Relief Program.,[3] which is chaired by the Chairman of the Federal Reserve Board and has as its other members the Secretaries of the Treasury and HUD, and the Chair of the SEC.


Fri, 02/11/2011 - 12:56 | 953085 Zero Govt
Zero Govt's picture

James B. Lockhart III goes from State housing regulator, oversight, committee funder to bailout of the mess he oversaw to private sector investor in the same with the consumate smoothness of snake oil ...what a small world (game) Washington politics is!!!

Fri, 02/11/2011 - 13:46 | 953332 ghostfaceinvestah
ghostfaceinvestah's picture

To be fair, this report isn't totally terrible, though I too am skeptical it will be implemented.  A few points:

a) increase gfees - that makes sense.  If they can increase them high enough to take away the govt advantage in retaining credit risk, maybe the TBTF banks will actually retain some themselves.

b) limit fannie/freddie to 90LTV - a good start, but why not all the way to 80LTV, and further pull in their guidelines so all fannie/freddie loans would be considered QRM loans?  as it is, there is a lot of debate over QRM, and the talk is that 80LTV will be the max, so why not restrict fannie/freddie to QRM loans?  i don't see how it is going to work anyway with some fannie/freddie loans being qrm and others not.

c) portfolio wind down - this should have happened back when Bernanke was buying 1.5T of MBS, why wasn't it?  in any case, just have Bernanke buy them - what the fuck is the difference at this point?

besides that the talk about promoting renting, etc was actually good.

too bad all the special interest lobbyists will kill anything decent in the proposal and leave all the bad shit.

Fri, 02/11/2011 - 14:17 | 953460 topcallingtroll
topcallingtroll's picture

80 percent LTV crashes the market, which would be a good thing for people in the market for houses.  If you looked closely at the details they are still proposing an implicit government backing.  They will end fannie and freddie as we know it to replace them with fannie and freddie in a slightly disguised form.

Fri, 02/11/2011 - 13:47 | 953336 TruthInSunshine
TruthInSunshine's picture

It's a debt-based, money-mechanics, fractional reserve world, and without credit doled out like free samples of dope, to even the least worthy borrowers, it all comes crashing down.

Ben Bernanke struggles with this vexing dilemna (or he could care less, depending on one's hazard of a guess at his true motives, goals and handlers).

Fri, 02/11/2011 - 14:04 | 953412 jmc8888
jmc8888's picture

Well if the thing that is ~95 percent of the mortgage market is dead...then what (sarcasm) is the mortgage market?

Oh yeah, private money will replace Ben Bernankestein's money? Really? (and they probably actually KNOW the mortgages are untracable, and thus uncollectable)

Private capital isn't coming back.  Not until the securitization fiasco is finished, which of course changes so much, who knows what happens directly after that.

But maybe they'll be like Beatrix and make sure the pension funds sell their gold to buy these potential private money mortgages.

Fri, 02/11/2011 - 14:19 | 953468 topcallingtroll
topcallingtroll's picture

The GSE model is declared dead.  Yet the new proposals contain an implicit government guarantee for catastrophic market conditions.  Does anyone else see the humor in this?

Fri, 02/11/2011 - 14:53 | 953604 Silence_Dogwood
Silence_Dogwood's picture

Quiz:  What capital requirement did Peter Orzag think was required for the GSEs in 2002?


Keep in mind, this is the guy who approved Obamacare to go through Reconciliation, because it was going to save money.

Fri, 02/11/2011 - 15:05 | 953635 Silence_Dogwood
Silence_Dogwood's picture

Ok, it's Friday.  I'm not very patient.

This analysis shows that, based on historical data, the

probability of a shock as severe as embodied in the riskbased

capital standard is substantially less than one in

500,000 – and may be smaller than one in three million...


if the probability of the

stress test conditions occurring is less than one in

500,000, and if the GSEs hold sufficient capital to

withstand the stress test, the implication is that the

expected cost to the government of providing an explicit

government guarantee on $1 trillion in GSE debt is just

$2 million.



 Whattdya think... Did anyone sell them 1tn of CDS for $2mm?  Imagine that offering protection on that for $2mm?


Orzsag is a criminal.

Fri, 02/11/2011 - 15:16 | 953672 Silence_Dogwood
Silence_Dogwood's picture

Of course, government officials hate the CDS market.  They don't like it when their risky behavior gets reflected in speads. 

Fri, 02/11/2011 - 15:21 | 953677 djrichard
djrichard's picture

"The GSE model is dead".  Almost sounds like these guys are trying to think outside the box and that Obama is finally unleashing his administration.  Almost.

I'll wait to get my hopes up for that when he has his back against the wall.

Edit: actually I'll wait for that when we all have our backs up against the wall.  Like what it took in Egypt.

Fri, 02/11/2011 - 15:22 | 953688 glenlloyd
glenlloyd's picture

I'm not sure I trust anything out of DC, especially regarding the GSE's.

Winding down these two black holes would mean housing prices would fall and mortgage rates would rise further.

NCRC has a vested interest in the perpetuation of the GSE's and easy money policy so their comments should be disregarded. We need to move back to the long term home ownership trendline and if that means people have to lose their mcmansions and go back to renting so be it.

People need to buy what they can afford, not what a realtor tells them they should shoot for. People have been conned on housing for too many years.

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