Quote:
Originally Posted by BrianTheMick2
This really should be considered a joke.
"The planned legislation, drafted with input from President Barack Obama’s administration, would replace Fannie Mae and Freddie Mac with a U.S.-backed mortgage-bond insurer that would cover losses only after private capital bears the first 10 percent, Senate Banking Committee Chairman Tim Johnson and Senator Mike Crapo said in a March 12 statement."
What is the default rate already on a 30-year mortgage bond? 3%?
So what if interest rates rise from 4% to 5%. That is a 20% loss. So the government is going to be responsible for 10% of these losses on top of the normal 3% default rate? What if rates go from 5% to 6%? Then the government (the saver) is going to be responsible for 30% losses on the homes? Furthermore all this money is based on the U.s. dollar which is losing about 5% a year.
Furthermore you got that debt leveraged 6:1 in a mortgage reit. Low interest to allow money managers to speculate with it with massive fees, then when the thing goes belly up the stockholder gets wiped out and the government pays the insurance to help the banks and mortgage etfs.
In 20 years, the average mortgage interest rate will be 15%, the people will either lose their life savings or they will eventually catch on to the fraud by government.
Last edited by steelhouse; 03-19-2014 at 03:50 AM.