Key Republican urges faster Fannie, Freddie sell-off

[Viva_La_Revolution]

Source: Reuters

An influential Republican lawmaker on Monday pressed for a faster sell-off of home loans held by mortgage finance giants Fannie Mae and Freddie Mac.

The two firms, known as government-sponsored enterprises, or GSEs, were taken over by the Bush administration in late 2008 amid mounting losses from mortgage loans gone bad.



Read more: http://www.reuters.com/article/2011/02/07/us-usa-housing-fanniemae-idUSTRE7165TJ20110207?WT.tsrc=Social%20Media&WT.z_smid=twtr-reuters_%20com&WT.z_smid_dest=Twitter

[patrice]

1. uh? . . . Because tranched derivatives are what they are, isn't there a problem with figuring out

WHO actually owns these mortgages?

How y' gonna sell something that you don't know who owns it?

[jmowreader]

7. No, there's no problem at all

It is very simple.

How tranching was SUPPOSED to work: a pool of mortgages of various degrees of risk would be assembled. They'd be separated into excellent, good, fair and risky tranches, then bonds would be sold against each pile. By knowing who the bondholders for each tranche were, and by knowing the contents of each tranche, one would be able to say "John Jones, Fred Smith and Helen Martin own the mortgages of Bill Baker, Mike Rogers and Lana Lane."

How it did work: They assembled the pile of mortgages, then sold bonds of various credit risk against the pile as a whole. When the bonds didn't sell, another pool would be created of the unsold bonds. Bonds would then be created from that pool, and sold until they ran out of members of the More Balls Than Brains Club who were willing to buy in. The remaining bonds would be retranched and resold, and on and on.

So...your question has a simple answer: there is absolutely no way to know who really owns the mortgages. Of course, the Republicans who wrote the Commodity Futures Modernization Act think this is a perfectly fine state of affairs.

[patrice]

11. Sounds as though it's time for us to think about the benefits of nationalization of some mortgages,

to me, anyway.

[Botany]

2. Do these people even care what happens to America?

We need to understand what this action will do the American people and its economy.

[DeadEyeDyck]

3. I agree that Freddie and Fannie should be liquidated

Break up the loans to 1000's of small banks. Having all that debt tied up with a few institutioins is what doomed us in the first place.

[Warpy]

4. Please read why Fannie was originally set up toward the end of the Depression

The Wiki article is fair and will get you started.

If you think your local bank would ever tie its money up in a 30 year mortgage, you're nuts.

[FloriTexan]

5. Can you clarify...

I recently refi-ed my home. Within 30 days the lender sold my note to Freddie Mac. I'm told to keep sending my payments to the original noteholder. Why would they sell my note to FM? Is your original post referring to the sell-off of foreclosed homes owned by FM?

[karynnj]

6. It tok a lot of reading to find who the "influencial Republican was" - Scott Garrett

How many - outside NJ ever heard of this very conservative Representative?

[westerebus]

8. Part of the NJ klan?

Some things just don't change in that neck of the woods. And I mean woods. Two - three hours west of Manhattan and you are in another country. And I mean country.

That's not a knock on good country folks who live in the woods. It just is what it is.

[karynnj]

9. It is a strange district - that runs along the NY border and then the PA border

making a big "L" Some of the part near NY (Bergen county is Democratic, but the majority of it isn't - and it is pretty rural. His predecessor was a far more moderate republican ( http://en.wikipedia.org/wiki/Marge_Roukema ) who he primaried three times. He received a huge amount of Club for Growth money. The last time she opted not to run for a 12th term.

[westerebus]

10. Lots of money in Morris and Hunterdon Counties.

Folks who left the City for the farm life of NJ. There are families of lawyers and stockbrokers going back generations in Morris County. Nice horse country. Used to do the hunter-jumper shows with the X back in 80's. She being the rider and very good too. Me being the water-boy, groom, groundsman, and general all around shelper of heavy items. Met some real interesting people.