Homeownership Lies: How Trump Could Be Fueling a New Meltdown
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Housing Crisis 2.0 and this is coming from one of the few guys out there that called the last one. Started warning people, 2006, about something wicked this way comes. Well, again, this.
You know, sometimes, what was that from the James Bond, which was Skyfall, Monty Penny saying, sometimes the old ways are best. Yeah. Again, remember a long time ago in the galaxy, far, far away when yeah, you had a local bank and you’d go to the bank and you’d put at least 20 % down on a house and get yourself a mortgage and the bank knew you, they knew the property and all, all was good in the world.
Yeah, anyway, these, the things that they’re doing right now, again, not just rhyme, they echo, echo, which, you know, issues that led to the last housing crisis. First and foremost, this is going to the Biden administration, enabling less credit worthy borrowers to qualify for mortgages. Yeah, unfortunately,
Fortunately, Trump is doing the same thing right now. I don’t like this at all. They’re talking about this and saying that this is going to help boost home ownership. It’s going to help lower costs for borrowers. Guys, it’s never okay. It’s never okay to get somebody into a home, quite frankly, that they can’t
afford or not ready to buy. Fannie and Freddie, okay, Fannie and Freddie for years required a FICO score to underwrite mortgages. Now, the left, the left is saying that’s not fair. That’s not fair. Lower income borrowers, they can’t qualify for a mortgage because they have thin credit histories or lower credit scores. Okay.
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then you have to improve your credit or guess what? You save more money to put more down on the home. So you got the new federal housing finance agency director Bill Pulte who said that Fannie and Freddie could begin to guarantee mortgages based on credit scores generated by Vantage Score. Now Vantage Score promotes a model
It’s more inclusive than FICO because it incorporates rent, utility, and telecom payment histories. Huh. This means that, again, lower income, younger out there that do not normally borrow or use credit cards can still get good scores.
They’re saying that this model will allow five million more prospective home buyers to qualify for loans. They’re saying that this could reduce closing costs. The FICO credit score thing, doesn’t cost much at all, quite frankly. Again, we already have mortgage delinquencies that are going up significantly.
significantly. People have been hit by inflation. I was last week here on the program, people bought homes, hoping that interest rates more, the mortgage rates would go down and they would be able to refinance and they’re getting hit right now. Not good.
Not good. Again, you’ve got a lot of kids out there that their credit scores have been hit because they’re not paying back their student loans.
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So again, they can’t afford to pay back the student loan, but their new Vantage score is gonna allow them to buy a home. Not good, not good. Again, this is well, Trump wants to, he wants to allow Fannie and Freddie to go on their own. He wants them to go public here. He put this out on social media and he says, I’m working,
on taking these amazing companies public. I want to be clear, the US government will keep its implicit guarantees and I will stay strong in my position on overseeing them as president. Now,
Again, how are you allowing Fannie and Freddie to go public and then also say that the taxpayer is going to backstop these loans? The history of Fannie and Freddie, and again, you can go back and read my columns leading up to the financial crisis, the type of money by Washington insiders that was made working for that.
company. Remember Franklin Reigns? It was a really great landing spot. Really great landing spot for politicians or politicians. I remember Bernie Frank’s gay lover who ran a brothel in Boston. He ended up working. Anyway, going back in the day. But anyway, you’re going to reprivatize these things, but then also continue to have a government
Backstop?
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Again, the journal just reported this as well. During the housing bubble, Fannie and Freddie used their implicit government backstop to borrow at low rates to buy and securitize risky mortgages. No proof of borrow income, no problem. When housing prices dropped, subprime borrowers sank underwater. Delinquencies and losses rose. The mortgage giants needed a government bailout.
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Again, at the time, many people were arguing that they should have been put into receivership so they, you know, they couldn’t come back again. Hank Paulson at the time put him into government conservatorship. Again, $190 billion capital infusion, $200 billion line of credit, Treasury got senior preferred shares, entitled the government to dividends as well as warrants.
to buy up to 80 % of their common stock. Fannie and Freddie lost $265 billion between January 2008 and March of 2012. And again, it would have been worse if the Fed didn’t buy mortgage-backed And again, Obama also made it
made it easier on them because it made it more difficult to foreclose on delinquent borrowers. Again, they’re easing underwriting standards. They want to let them out so they can, you know, get out and make money. I don’t like this at all. Again, I don’t understand why the government needs to be involved in this at all. mean, government’s already involved with housing as far as Section
housing and forcing certain builders out there. You have to build X amount of homes, lower income and involve with that. Let the banks lend the money. Again, the old ways were best. We didn’t have the problems. Prior to securitizing all these mortgages, doing all of this nonsense,
Again, you’re not helping anyone out. Not helping anyone out to get into a house that they cannot afford. It makes no sense. We do not need Housing Crisis 2.0. Watchdog on wallstreet.com.
