Former “private corporation” Fannie Mae returns to the government trough yet again; this time to ask for an additional $4.6 billion.
The Federal Housing Administration (FHA) raises premiums to shore up its insurance fund. Back in November, an audit of FHA suggested that it might need a bailout.
FHA now faces enormous strains on its finances, and it might be too big to fail:
The FHA’s share of the mortgage market has increased sharply since the depth of the financial crisis in 2008. It currently backs about a third of all new mortgages; in 2006, its share of the new loan market was just 5 percent.
Taking into account the big presence of Fannie Mae and Freddie Mac, the government now backs about nine of every 10 new home loans.
Bernanke reported to Congress this week and said he’ll keep QE3 loose in the holster. But in the meantime, he’ll keep interest rates at zero.
Ron Paul’s retort:
“Nobody’s smart enough to have central economic planning,” he said. “Our time has come for serious discussion on monetary reform.”
“The Fed’s going to self-destruct eventually anyways,” Paul added later.”
Meanwhile, Case-Shiller reported that its composite home price index was down 4 percent in December (year over year). Some say it may be headed toward the dreaded “triple dip.” On the other hand, houses are becoming more affordable.
Over the weekend, the NYT reported that “one group is sitting pretty: landlords.”
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“the government now backs about nine of every 10 new home loans.”
Just disgusting and unbelievable. Khrushchev, you were right.
This is awful — private corporations are essentially practicing in risky means to bloat their own pockets, and yet dump the pitfalls on the American taxpayer. We’re $15T in debt, i.e. the government has already spent the next $15T of money that it hasn’t yet collected from its own people.
It’s reports like this that anger me and make me want to violently take my country back. I hope Dr. Ron Paul gets elected — he is the only man that understands that a faulty business must be allowed to fail, and should not be allowed to run riskily knowing that it won’t have to pay for its damages.
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Ben Stein in the right-ish American Spectator feels a Housing Bull that’s stirring:
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