Fannie/Freddie

[csrhjr31]

I have been hearing a lot about Frannie Mae and Freddie. What are they?

[fltoo]

Fanny started in 30s and Freddie in 70s and are nicknames for the buyers of mortgages on the secondary market.

In a simple nutshell, when you get a mortgage, your mortgage is sold to a company so that your mortgage company can get more money (capital) to lend to more people.

Google them, probably lots of info on how and why they were started better than I can explain.

IMO they are outdated and should not have been bailed out.

[BKParalegal]

FNMA ( Fannie Mae) and FHLMC (Freddie Mac) are GSE's ( Government Sponsored Entities) that make and guarantee mortgages. Lately they have come under fire for a history of making bad loans, poor accounting practices and essentially being greedy with securitizing loans. Indy Mac, the other GSE was recently seized by the government and Congress has just passed a bill to subsidize or bailout Freddie and Fannie. Reminiscent of the S&L scandal of the 80's.

[fltoo]

Cept, Fannie and Freddie don't make loans. They buy your loan, package it with other loans and sell them to investors. These investors are guaranteed their investment because although Fanny and Freddie are private companies, they are government backed.

When F&F get in trouble like they are now, guess where the money comes from to secure the investor's money...................

OUR TAX DOLLARS!

[WhatMoney]

Fannie Mae and Freddie Mac own or guarantee almost half the country's $12 trillion in outstanding home mortgage debt. The government has no choice but to bail them out as they are both chartered by Congress as government-sponsored enterprises, which gives them an implied government guarantee. A creation of Congress and too big to fail - sounds like government to me.

IndyMac was just a mortgage lender private bank, second to Countrywide. They are not a GSE and didn't get bailed out. Indymac's stock was almost worthless before the FDIC took them over.

[fltoo]

Indy is not a GSE. I think the confusion is that when the gov bailed out the bank, they had to start lending according to GSE guidelines.

[JRScott]

They should let Fannie and Freddie fail, even though they are involved in 5+trillion dollars worth of mortgages the taxpayers cannot afford to buy them out. To completely take them over would double the national debt overnight. That would make the interest payments on the debt more than social security currently eats up and would impede our ability to operate as a country. (Basically you'd be looking at an economic collapse similar to the USSR in the 1980s).

By allowing them to fail and having other private institutions buy them up, either wholesale or piecemeal you allow the burden to pass from the taxpayers to the investors. You also show that the government is not going to bail you out when you operate poorly.

Course we could nationalize the Federal Reserve Bank due to insolvency and forgive ourselves the National Debt, though I'm sure foreign investors would take that as a very bad sign.

[fltoo]

They should let Fannie and Freddie fail, even though they are involved in 5+trillion dollars worth of mortgages the taxpayers cannot afford to buy them out. To completely take them over would double the national debt overnight. That would make the interest payments on the debt more than social security currently eats up and would impede our ability to operate as a country. (Basically you'd be looking at an economic collapse similar to the USSR in the 1980s).

By allowing them to fail and having other private institutions buy them up, either wholesale or piecemeal you allow the burden to pass from the taxpayers to the investors. You also show that the government is not going to bail you out when you operate poorly.

Course we could nationalize the Federal Reserve Bank due to insolvency and forgive ourselves the National Debt, though I'm sure foreign investors would take that as a very bad sign.

Ya think? LOL

The secondary market should be completely privatized.

[bmrigs]

Course we could nationalize the Federal Reserve Bank due to insolvency and forgive ourselves the National Debt, though I'm sure foreign investors would take that as a very bad sign.

You cannot nationalize the Federal Reserve Bank because it is privately owned and controlled. The govt needs to tell those owners that we are no longer interested in allowing you to issue the currency with interest and we will print our own money.

[fltoo]

Although made up of private banks, the Fed is not a for profit "private" company and is owned by no one.

It has accountability to Congress.

[AngelinaCatHub]

You cannot nationalize the Federal Reserve Bank because it is privately owned and controlled. The govt needs to tell those owners that we are no longer interested in allowing you to issue the currency with interest and we will print our own money.

The Federal Researve came about in 1913 on Jeckle Island Georgia. It is in a Hotel next to a house owned by Rockefeller. The very large meeting room is labled the Researve Bank room.

The Federal Researve used to make a Federal Researve Note (now that we use them 100%) while the Treasurey used to put out silver certificates. At one time Private banks printed money (via Treasury) called a bank note and will indicate that at the top with a red seal.

All money is worthless without a LOT of faith. This faith is being stressed right now in this day and age. 'Hub

[bmrigs]

Although made up of private banks, the Fed is not a for profit "private" company and is owned by no one.

It has accountability to Congress.

LOLOLOL accountability to Congress. Are you naiive? The Fed has never been audited. Do you know how much money the Fed makes on interest alone when they tell the Treasury to print out worthless Federal Reserve Notes? Not for profit you say? It's all about profit to them. Who is them? Meet your Creditors who own the Federal Reserve and who own this country.

Rothschild Banks of London and Berlin,
Lazard Brothers Bank of Paris,
Israel Moses Sieff Banks of Italy
Warburg Bank of Hamburg and Amsterdam,
Lehman Brothers Bank of New York,
Kuhn Loeb Bank of New York
Chase Manhattan Bank of New York,
Goldman Sachs Bank of New York.

[AngelinaCatHub]

'Riggs, right on. Who would audit them, Congress? Like having a Fox to guard the hen house. 'Hub

[bmrigs]

'Riggs, right on. Who would audit them, Congress? Like having a Fox to guard the hen house. 'Hub

There have been attempts to audit the Fed by a few bold members of Congress but they have always failed. I like your analogy.

[fltoo]

LOLOLOL accountability to Congress. Are you naiive? The Fed has never been audited. Do you know how much money the Fed makes on interest alone when they tell the Treasury to print out worthless Federal Reserve Notes? Not for profit you say? It's all about profit to them. Who is them? Meet your Creditors who own the Federal Reserve and who own this country.

Rothschild Banks of London and Berlin,
Lazard Brothers Bank of Paris,
Israel Moses Sieff Banks of Italy
Warburg Bank of Hamburg and Amsterdam,
Lehman Brothers Bank of New York,
Kuhn Loeb Bank of New York
Chase Manhattan Bank of New York,
Goldman Sachs Bank of New York.

I didn't say having accountability to Congress is a good thing. Just stating that it is accountable to Congress and correcting the wrong info about the Fed being a private company.

BTW, no I am not naive, I do not buy into "the sky is falling."