US Government takes over mortgage giants

If a Democratic Congress were ever to prove useful, it would be to hold some of these Wall Street crooks to account. I'm not holding my breath, though.

yes they gave a mortgage to people who did not qualify.They lost a fortune what a shocker.Now the taxpayers take the hit. The govt is broke we have nothing left to sell even our houses are not worth crap. Back in the 80s we still had real estate that the japanese were buying up. Now we can only borrow.

I'm a loan officer and commissions are no where near what was mentioned above. As a loan officer, I make recommendations to clients based on their goals and situation then leave it up to the client to decide.

It's not necessarily the I/O loan that's gotten everyone in this mess, it's mostly subprime and the option arm (neg am). There are alot of good lenders out there and some not so good. There's also consumers that hear what they want to hear and choose not to do the right thing. Do I make a normal payment or do I spend it on something else? So it's a mix. I've never done a option arm by the way.

The products that I recommend are not pushed by the company. They are, as i said, what I recommend based on the clients situation. I get paid the same no matter what product i close.

So yes, there as some losers in the mortgage industry but not everybody. At the very least, hopefully this will weed out the unprofessional.

No company makes 20k on a loan too, that's ridiculous. A normal mortgage company might make 1/4 pt to 1pt on a loan after all overhead expenses are paid (underwriters, processors, closers, etc). Most are closer to the 1/4 pt right now.

They suffer. It is not fair, but what should be done with the people who did got a fixed loan and make their payments. Shouldnt they be rewarded for being responsible. Instead all of their neighbors get bailed out, or forclose, and they actually get hurt just as bad on the value of their homes.
My reward is that my credit is still good and I'm not stuck in a home or waiting to get kick out of my home.

This is a quote from John Mauldin's weekly newsletter (you should subscribe to it if your interested in the financial world) but it's partly congress that got us into this.

From the Frontline Weekly Newsletter from a week or so ago:

As long as the prices of homes kept rising, Fannie and Freddie had no problems. That extra leverage allowed them to post record profits every quarter, boosting stock prices and keeping those bonuses and options for executives rising. And Congress let them do it. In fairness, there was a significant minority who wanted tougher regulations, including the Bush administration. But a bipartisan majority decided to take the campaign contributions and listen to the fabrications about how much Fannie and Freddie did for the country and how there was no risk.

And so now we are at a point where we are going to be forced to pick up the very expensive pieces. The alternative is to let the world as we know it go up in smoke. The mortgage market is dysfunctional now without Freddie and Fannie. The housing crisis would be far worse if you let them die. And once you determine to pick up the costs, you have gone down a very slippery slope. Yet if we don't do it, the systemic crisis will be far worse than the problems resulting from Bear, and those would have been horrific.

This is the Savings and Loan Crisis, Part 2. Maybe they can figure a way to lessen the cost. And the hope is that at some point the companies once again regain their value and the costs will be somewhat mitigated.

Where's the bailouts for the consumers?
If I'm correct the goverment is requiring the mortgage co to convert the loans over to a 30 year fixed loan regardless if the consumer is up side down in the loan. I think there is a few other thing they are doing but I'm not sure what they are.

My reward is that my credit is still good and I'm not stuck in a home or waiting to get kick out of my home.


Agreed, but if in 5 years your ready to move and there are still 12 houses for sale on your street, that sucks.

Well this is interesting (http://www.reuters.com/article/RussiaInvestment08/idUSL816846420080908?pageNumber=1).

At the start of the year Russia held $100 billion -- or over one sixth of its gold and forex reserves -- in Fannie Mae, Freddie Mac and Federal Home Loan Banks. The holdings have since been reduced by around 40 percent.You know what's really sad? The Russians have $582.5 billion to invest.

Agreed, but if in 5 years your ready to move and there are still 12 houses for sale on your street, that sucks.
Well when I purchased my home in that boom back 4 years ago I knew that it could not last but so long. The home I purchased was a for sale by owner by a doctor who I hope knows more about his practice then selling a home. I purchased the home for around $100,000 less then what the market would bear so I'm in great shape anytime I ned to sell my home.

Also I don't think it has become that bad in most areas that 12 houses are for sale on one street.