AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (3 comments)

  1. Should we worry about rising home prices?“…

    Ahhh, don’t bother since it won’t do any good any way…

    The federal government is going to skew the market…

    Obama administration pushes banks to make home loans to people with weaker credit

  2. Todd Mason

    I guess we need to translate for Juandos the Juander Dogmatist. “The market share of private label MBSs has dropped to almost zero.” Take a look at this Goldman Sachs 2006 issue and you understand why. California second mortgages. Average equity of 0.79 percent. (Yup LTV of 99 percent.) No docs accounted for 58 percent of the loans. To clarify, holding second mortgages, bondholders got zero recovery in foreclosure.
    GS peddled crap because investors were lining up to buy it, or Sloan quotes Wall St wisdom “When the ducks quack feed them.” http://money.cnn.com/2007/10/15/markets/junk_mortgages.fortune/

    Well, the ducks aren’t going to quack for a long. long time. And, as Mr. P puts it, “This is important because it implies that virtually all MBS are issued by well-regulated institutions as opposed to largely unregulated non-depository institutions.” And that would be a tacit admission that Wall St blew up the housing market.

    Banks are too cautious also, which is why O wants them to loosen up. Ginnie Mae has packaged high LTV loans (FHA, VA) since 1970 with barely a hiccup until reckless private label MBS lending drove housing prices into the stratosphere. It’s called underwriting.

    1. todd parroting back some of his insipid social justices studies claims: “I guess we need to translate for Juandos the Juander Dogmatist“…

      Actually todd old sport what you really need to do is change from your normal position and look for some realistic sources of information besides the Obama water carriers at CNN…

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