Ive fired off my strongly worded opinion to all the Senate banking members who voted yes last week I'm going to tweak the wording a bit for Mr Reid and Ms feinstein. I asked for responses when it was an option to stay tuned...........
I am contacting you regarding S.1217, as a taxpayer and citizen of the United States I am amazed that anyone would think this bill is anything but destructive to housing reform and the economic health of our nation.
Fannie Mae and Freddie Mac are not the culprits here, they were founded in 1938 during the Great Depression by Franklin Delano Roosevelt as part of the New Deal, up till then commercial banks, life insurance companies, and mutual savings banks typically offered 5-year balloon mortgages at a loan-to-value ratio 50%. I do not know anyone that has the ability to put a down payment on a house of 50% or even 20% for that matter, especially in the part of the country I live in. Banks were unwilling to provide 30 year mortgages then, and the same is true today, without the backing of Fannie and Freddie.
"Winding down" two profitable and essential parts of the United States economy and housing markets is completely irresponsible on your part, without Fannie and Freddie housing prices will drop as no one will be able to afford the loan to buy a home, rental property would pop up everywhere and this would lead to decline in neighborhoods. Everyone knows when you own your own home most take pride in ownership, this is not true with rental property.
Banks and sub prime lending standards are at fault for this crisis. I have owned several homes over the years and my personal experience is as follows:
1) In 1993 I applied for a home loan, I had the same job for 14 years, had good credit and the payment was well within my means, I provided proof of employment income, years of bank statements and tax returns, the process took weeks and was questioned right up till closing to make sure I qualified.
2) In 1998 I applied for a home loan the only thing different than 1993 was now I had had the same job for 19 years, but the same process applied, income verification, bank statements, tax returns, home appraisal.
3) Now lets fast forward to June 2005 I call my mortgage lender Citibank to get a home equity line of credit I was in awe when over the phone my house was appraised at $630,000, and I was offered not the $75,000 I needed, but $400,000. I was responsible and took only what I needed knowing I would never be able to repay that amount of money.
The problem is not Fannie or Freddie but an egregious lack of lending standards, and then the loans were then pushed off to Fannie and Freddie. This is fraud and the proof of this is evident in the fact that lawsuit's against these perpetrators have been won and fines and money repaid. Has justice been served? No! generally those who commit fraud do a little prison time, not only is this "too big to fail" but too big to jail.
In closing as a member of the Senate Banking Committee I want to remind you your first obligation and responsibility is to the tax payers, constituents, and citizens of this nation. Not the banks. My fear is if this bill were to pass the entire landscape of the nation will change for the worse and our children, grandchildren and great grandchildren will see it with their own eyes. This astonishing irresponsible piece of rubbish needs to be tossed into the trash never to be seen again.
Very truly yours,
Hollyk
