Fannie Mae (FNMA)

[955]

Agreed, securitization is the life blood of the capital for buying homes.

Number one, if it ain't broke, don't fix it. No need to reinvent the wheel. An F&F based securitization system works and has worked for 80 years. F&F have saved the economy numerous times throughout their history including 2008. Why kill the goose that lays the golden egg?

Gov intervening with "Homes for All" policies and putting into place HUD mandates for F&F to comply with those policies is putting the cart before the horse. While the end goal of increasing home ownership may have been a sincere one, mandating F&F to securitize loans that are of questionable quality at best is bad policy. The investment community will eventually see right through it and the markets for private securitization will soon dry up.

The path to increasing home ownership is through jobs, good quality jobs such as manufacturing for example. Create an environment where quality manufacturing jobs are plentiful and home ownership will increase as a result, naturally. No direct intervention with housing required. Most folks, not all, by nature, want to own their own homes. So, the motivation is already there.

The root cause of housing woes began back in the 1980's when Gov allowed corporations to export good manufacturing jobs overseas, essentially unregulated. We gave away our first fruits. A sizable portion of the economy was lost and along with that, most importantly, a significant portion of our creativity. Many talented folks were placed out of work. That played a key part in folks inability to afford homes. We are now reaping the benefits of that.

955

assume you are NOT holding any F and F paper

assume you are the decider

what would you build as the mortgage system if F and F were too left and banks sunck (their securitizations did fail !!)

who would do the securitization that is the life blood of the capital for buying homes?