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2008-05-20 — bloomberg.com
``Only an entity that gets to play with Other Peoples' Money would dare to do something so foolish with its capital as Fannie is doing,'' writes an e-mail correspondent. ``In the face of a huge re-adjustment downward in housing prices, the company is lowering lending standards and turning on the credit hose.'' ... Because Fannie and Freddie require borrowers who put less than 20 percent down on a home purchase to buy mortgage insurance, Fannie's relaxation of LTV standards may be a moot point. Mortgage insurers are reeling from losses and may not be willing or able to write insurance for loans with a 97 percent LTV in areas where home prices are declining. That could push Fannie to self-insure, raising the fee it charges for purchasing or guaranteeing mortgages, according to some housing analysts. Luckily, the government is great at running insurance scams. I mean schemes. source article | permalink | discuss | subscribe by: | RSS | email Comments: Be the first to add a comment add a comment | go to forum thread Note: Comments may take a few minutes to show up on this page. If you go to the forum thread, however, you can see them immediately. |