Your tax dollars at work:
Freddie Mac, the taxpayer-owned mortgage giant, has placed multibillion-dollar bets that pay off if homeowners stay trapped in expensive mortgages with interest rates well above current rates.
Freddie began increasing these bets dramatically in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages.
Well, the mortgage process is a whole mess, ask anyone who has tried to re-fi or get a new one lately.
Yes, the government needs safeguards, but they have completely shackled the industry.
Just try to re-fi a Jumbo. 2nd home re-fi- almost impossible.
And this is with great credit and loads of cash.
Posted by: d c | Jan 30, 2012 at 12:38 PM
How is thie even legal?
Posted by: Billy Jones | Jan 30, 2012 at 04:11 PM
Good report on NPR today by the reporters who broke the story. Apparently, it is legal (for now, at least), with Freddie asserting (A) that it is supposed to find ways to make money and stay solvent, and, (B), that the loan side of the house is firewalled from the investment side. (They aren't the first to say that.)
I find the firewall claim hard to believe, since top management must know what's going on in both sides of the house.
It's getting so we need to treat financiers like unruly kids who, caught setting fire to the house, shout, "You told me to keep busy, but you didn't tell me not to set fire to the house. So, it's not my fault."
Posted by: justcorbly | Jan 30, 2012 at 05:34 PM