Certified Forensic Loan Auditors, LLC

 
  Upcoming Classes

Search CFLA's Article Archive:

Fannie, Freddie Need a Permanent Fix

washingtonpost.comMay 4, 2013

By Editorial Board

AMONG THE many pieces of unfinished business remaining from the financial crisis, none is more important than reforming mortgage finance. Fannie Mae and Freddie Mac, the government-sponsored enterprises that own or guarantee more than $5 trillion worth of U.S. mortgages, have been under direct federal control since their collapse in mid-2008. Having absorbed $170 billion in government bailout money, they are now profitable and are likely to remain so for years to come. But even though Fannie and Freddie are no longer a drain on the U.S. Treasury, the issue of how to restructure government’s role in the home loan market so as to avoid a future bailout remains critical.

It is no criticism of Rep. Mel Watt (D-N.C.), a knowledgeable member of Congress, to say that his nomination to be the chief regulator of the Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie, does nothing to advance their restructuring.

Such an effort might succeed if it is bipartisan, but it will surely fail if it becomes polarized. In naming Mr. Watt, President Obama chose not a technocrat but rather a politician sure to stir Senate Republican opposition. Mr. Watt was the favorite of congressional Democrats and liberal housing policy advocates whose top priority for Fannie and Freddie is not long-term but short-term: to underwrite more aggressive loan modifications, including principal reductions, for distressed homeowners.

The acting FHFA chief, Edward J. DeMarco, opposes that, and Mr. Obama’s progressive base has been clamoring for Mr. DeMarco’s head, accusing him of punishing the middle class and stalling economic recovery.

Last July, Mr. DeMarco concluded that the benefits of principal reductions — avoided defaults, enhanced economic growth — would be outweighed by the costs of inducing borrowers who could pay their loans to default. A new Congressional Budget Office (CBO) analysis, requested by Mr. Watt and others, finds instead that a principal-reduction program “would probably result in small savings to the government, slightly reduce mortgage foreclosure and delinquency rates, and slightly boost overall economic growth” — as compared to current policy, which contemplates only interest-payment reduction.

Our interpretation is that whether Mr. DeMarco or the CBO is right (Mr. DeMarco has not yet responded to the CBO paper), this is a close policy question upon which the entire U.S. economy does not hinge. At most 1.2 million borrowers — 4?percent of those with mortgages backed by Fannie and Freddie — would even be eligible, the CBO said. Mr. DeMarco is reasonably concerned about fairness not only to borrowers in or near default but also to those who have sacrificed to stay current.

The housing market seems at last to have bottomed out: Prices are rising at the fastest rate in seven years. Underwater mortgages, though still a drag on the economy, are becoming less of a burden. According to CoreLogic, a real estate data service, total negative equity was $628 billion at the end of 2012, down from $801 billion in 2009.

Principal reduction, therefore, is becoming yesterday’s issue. What matters for the future is a permanent fix to the mortgage-finance system. That means winding down Fannie and Freddie and building new structures free of their design flaw — socialized risks and privatized profits. Mr. Obama’s Treasury Department urged such a solution more than two years ago but has yet to propose legislation. That’s what the president and Congress should be working on now.


Back to May 2013 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
spacer
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
 
BBB Logo

 

spacer
Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:


 

DVD Sets Only $99

 

FREE Mortgage Fraud Analysis

 

Order Cutting-Edge Services Now

 

Quiet Title Packages from Licensed Attorneys

 

Affiliate Services

 

CFLA Sponsored Attorney Links

 

Take-Home Education Package

 

ALB Law Firm

 

Advocate Legal

 

The True News Network

 

Sutton Law Firm, P.L.L.C.

 

Rubenstein Business Law

 

Atighechi Law Group

 

Scunziano & Associates

 

Get Certified to Perform Mortgage Securitization Audits

 

CFLA Training Academy

 

Expert Witness Services

 

Cutting Edge Expert Securitization Reports

 

CFLA Credit Cards

 

Breaking News

 

Letters to the Editor

 

CFLA Weekly Newsletters

 

Code of Ethics

 

Testimonials

 

Instructional Videos

 

Job Opportunities

 

License Opportunities

 

MARS Rule

 

Product Samples

 

Resource Links

 

Servicer Information

 

Foreclosure Laws

 

REST Report

 

Quiet Title Packages from Licensed Attorneys

 

Advertise on CFLA

 

Advertising Space: Mortgage Securitization, Quiet Title

 

Certified Forensic Loan Auditors, LLC
13101 West Washington Blvd.
Suite 444
Los Angeles, CA 90066

Phone: 832-932-3951
Toll Free: 888-758-CFLA (2352)
Mobile Users: CLICK TO CALL
info@certifiedforensicloanauditors.com

   
 
CFLA IS NOT A LAW FIRM AND DOES NOT PROVIDE ANY LEGAL ADVICE. CFLA DOES NOT OFFER FORECLOSURE CONSULTING OR FORECLOSURE RELIEF
SERVICES. CFLA DOES NOT OFFER OR ASSIST WITH ANY LOAN MODIFICATION SERVICE. CFLA ALWAYS RECOMMENDS THAT CLIENTS RETAIN COMPETENT COUNSEL IN THEIR RESPECTIVE JURISDICTION. CFLA HAS A FREE PROGRAM TO REFER CFLA CLIENTS TO LAW FIRMS IN NEARLY EVERY STATE AND CFLA
DOES NOT CHARGE OR OBTAIN REFERRALS FEES FOR THESE SERVICES. SERVICES NOT OFFERED TO RESIDENTS OF THE STATE OF NEVADA.

 
Home About Us Privacy Policy Terms of Service Disclaimer SERVICES Careers Contact Us
 
COPYRIGHT © 2007-2016 Certified Forensic Loan Auditors ™ All rights reserved