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jnevin
New member
They're doing it so the banks can continue to lend and make money. Short term I think it'll be ok. I just don't think it will be short term.
I think WAMU is going to tank in the next couple of weeks. Wachovia too.
The fannie and freddie takeover........
- Thread starter redsamurai
- Start date
They're doing it so the banks can continue to lend and make money. Short term I think it'll be ok. I just don't think it will be short term.
I think WAMU is going to tank in the next couple of weeks. Wachovia too.
Lehman Brothers took a shit today too. 45% drop wtf? You are right. Can we continue to bail these banks out? I don't think it is healthy and it definitely isn't a long term fix. All this predatory lending is biting them in the ass. Some piece of shit mortgage company actually let my 80 year old grandfather refinance his house and get a second mortgage! Wtf?? I am sure they were backed by Fannie or Freddie too. Like the poor old fucker is going to be around to pay off his new 15 year note.
txbondsman
New member
It's true they got pulled in by the 2% no down for houses, I get that, bad business imo. BUT, if I make say 1200.00/mo, have the expected expenses, gas, food, etc., and I go and buy a house for 200K, knowing that at some point the ARM will kick in, I'm a damn fool. Why would we want to bail the dumb sumbitches out. To hell with the damn Freddie and Fannie, they'll reorganize and so will the others all the way down the line. Banks and people lose money all the time for making bad deals. I bet they won't offer loans like that again. The people will lose thier houses and they go get one that they CAN afford. The banks will eat shit alright, the investors will clean up on refis, and all the money will be reinvested, loaned by other banks, and they call it reality. Mickey is just a rat and Minnie is a whore.
jnevin
New member
Second liens aren't usually backed by fannie or freddy. One thing people aren't keeping in mind is that it's the loan officers and borrowers and not the banks that have done this. Outside of ameriquest and household, I can't think of and lenders that really pushed predatory practices. The lender would be responsible for the loan if it went into default before it was sold on the secondary market.
you're a smart egg
Takeover of FNMA/FRE potentially relieves banks & brokerages from many of the mortgage problems. Banks therefore feel more confident to increase liquidity to customers and between each other. Customers and institutions have access to more money to do business. Business creates profit. Profit gets reinvested into the market and various infrastructure. World investors make more money.
By the way, if you search out my posts from last year youll see me talking about Credit Default Swaps causing problems after Collateralized Debt Obligations. Guess what people just started talking alot about as far as the new problem. (I like pointing out how awesome I am).
Anywway, at the end of the day all this takeover was meant to do was to let the bigger banks/brokerages (JPM, WFC, BA, etc) feel more comfortable loosening the purse strings when it came to issuing credit. It worked for about 12 hours until Lehman's deal with the gooks apparently feel through.
A write off isnt technically a loss. What I mean is that when a company like Lehman writes off bad debt, they arent technically losing revenue...they are basically removing the investment from its balance sheet and no longer counting it as an asset. Less assets means their debt ratio (as a % to assets) increases. This is also different than a write down (which a lot of companies are doing as well) which consists of keeping the asset on the balance sheet, but reducing the value of it.
Yup
Yes, this is only a stop gap measure and will make a small difference for maybe 12 months. Long enough for the new administration to worry about it.
Either one of those would be bought out by JPM. Wamu was extended an offer a few months back but decided on private equity instead. Wachovia will probably refuse any offer as they recently changed leadership.
The only hurdle is that JPM (arguably the only company in a position to take on such risk right now) currently holds 8% of the nations cash deposits. By law no bank can go over 10%. Buying WAMU will put it above that threshhold.
Expect some laws to change.
Even up until the middle of 2007 trying to convince an investor that the real estate boom WASNT going to last forever was next to impossible. You wouldnt believe some of the retards Ive seen. Seriously.
