Wednesday, December 28, 2011

What will the #end of #FNMA and #FreddieMac for the Single Family SINS Mean for Apartment Loans

The scheduled execution of FNMA and Freddie Mac has been delayed do to the Economic Conditions of the Housing Market
No MATTER WHAT SINGLE FAMILY LOAN RATES WILL RISE LOCK IN IF YOU CAN NOW.
It is only delayed  - (their corporate sins as viewed by congress people are too high to keep them ) THE Collective SINS of these  Companies and former Executives doomed them for Eternity and now the choices are which HIGHER PRICED LOAN PROGRAM will the United States move to post Agency Execution.


The APARTMENT LOAN DIVISIONS ARE BOTH PROFITABLE AND have supper low defaults and losses. They must be spun off or something to get them out of the agencies under Congress's executioners orders.  


There are currently several models.


1. Private Everything let banks and finance companies make the loans with no insurance wrap like now from the federal government.
This will lead to spotty lending in middle and lower class neighborhoods and rates will go up at least 1.5% over current spreads over ten year treasury.  This is favored by GOP private everythingers..


2. Some sort of covered bonds scheme. I don't get covered bonds for some reason. Maybe a little government insurance.


3. Since they are making a profit have low losses and basically where one of many parts of the agencies that worked swell make them into new companies, add competition with good capital and give them a GNMA like government insurance wrap if they meet all the net worth, servicing and honesty tests. This is backed by most intelligent people in the apartment mortgage business which is not quite as sleazy as the single family side.




More later

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