Posts Tagged ‘subprime mortgages’

US Regulators To Aid Fannie Mae & Freddie Mac

Deregulated lenders proved irresponsible and criminal in their abuse of mortgage lending. Will we not ever learn these super salesmen will carelessly squander our hard earned money to finance their lavish lifstyles and egomania.

Our major mortgage buyers have been stuffed with high risk loans that should have never entered the financial system. The issuing of easy credit loans fueled a real estate building frenzy. We are overbuilt and this is lowering overall house prices. Now we have increased energy prices that are driving up prices across the board. All these increased costs will cap any hope of increasing real estate prices. Only high quality borrowers are getting loans today.

Money is very tight due to fear of a complete collaapse in our financial markets. Overseas investors are wanting assurances that their investments in the US are not becoming worthless.  Refunding Freddie Mac and Fannie Mae will not help investors into this fund.

This lack of credit will cause a stagnant economy all by itself. Recapitalizing our core lenders will go a long way to alleviate fears and provide necessary liquidity. As usual Washington has been slow to fix the problem. They have been trying to determine just how bad the financial problem is. Well it is very bad and help is not coming fast enough.

Very aggressive procedures need to be created to purchase these bad loans and recapitalize our banks so they can get back to lending. Currently they have so little capital only low risk loans get funded. Everyone else is shut out. Small business need access to money or they will fail.

Higher energy prices will create opportunities to economize. We must adjust to these economic changes fast or a very deep recession will crush many otherwise good business men and make for a long slow recovery. We have lost a lot of our economic momentum due to the credit crunch.

Leslie J West is a writer and real estate investor. Visit Real Estate Flipping , Real Estate Investing and Commercial Real Estate Investments.