www.themortgageadvantage.com Discussions are under way to restructure the trillion mortgage industry and wean Fannie Mae and Freddie Mac’s dependence from Uncle Sam’s battered pocketbook. Fannie was created in 1938 after the collapse of the our housing market during the Great Depression. Freddie was established in 1970 with a similar charter. They buy loans from banks and lenders refilling their coffers, allowing an uninterrupted flow of mortgage lending. But before Fannie and Freddie purchase the mortgages they must meet their guidelines. Our legislatures are pushing to give the largest purchasers of home loans back to the private sector: the big banks. That’s right boys and girls, the same entities that caused our Mortgage Meltdown. In 2004 Bear Stearns actively marketed its subprime mortgage guidelines. 100% , stated, investment, 480 credit scores (okay that is an exaggeration, but you get the drift). They were the wunderkinds of creative underwriting. But that was before it’s fire sale to J. P Morgan Chase in 2008. Countrywide soon led the loosey goosey, anything goes cash hungry bandwagon. (You’re a felon in prison? Do you have a PO Box we can use for an address?) Wall Street demanded mortgages and to continue to feed the mortgage-hungry beast, underwriting became more and more about the distribution of funds instead of quality. Wall Street (and our government) put pressure on Fannie and Freddie to stop being such fuddie duddies. Our protectors of our mortgage …
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