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'Shameful': Warren Warns Trump Plan to Privatize Fannie Mae and Freddie Mac Would Make Housing Crisis Worse

Originally published at http://www.commondreams.org/news/2019/09/06/shameful-warren-warns-trump-plan-privatize-fannie-mae-and-freddie-mac-would-make

You know the gop is proud. The Trump wrecking crew is making more headway on the gop and 1% agenda than anyone in the past.

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Approximately 10 months ago, an executive at Fannie / Freddie wants to reduce down payment for a house to 3% for credit worthy purchasers. These hopefully would be working folks.

Private firm holding half of USA home mortgages is ripe for disaster. Maybe break up this single entity to ten with provisions that they must each sell individual mortgages to the borrowers local bank or credit union. Within a few years the ‘bond’ bubble is gone.

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SHAMEFUL: Warren cozying up to electoral college voters and…

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Precisely the exact opposite of what Fannie and Freddie do – they buy up mortgages. And do we want to see a repeat of the housing bubble when the private sector bundled mortgage debt into CDOs and sold them to investors who didn’t understand that “tranches” of sure-to-default mortgages were in the mix?

In the meantime, what’s to stop prospective homeowners from getting their loan from a local bank or credit union now?

Except for Bill Clinton.

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Mortgage made in good faith with local bank was sold to Chase !
Imagine that.
So, the local bank pocketed a ‘finders fee’ or ‘originators fee’.
A few thousand dollars.
Chase did package this one with others into a package that they sold to investors such as pension funds, etc.
Chase currently makes money on this particular property by collecting a ‘handling fee’. My payment goes into their hands. They play with it in markets. I do not know if chase puts aside any money for the eventual bond redemption / interest accrued.
Most likely, there will be a bubble bust - again.

I am not proposing any mortgage bundling into bonds, sold by London.
I am suggesting we revisit VA home loans, FHA house loans.
Also HUD and treasury are trying to have student loans and house mortgage united with an affordable payment.
The average college student loan payment is $200.00 per month. Heck, many of these complainers do not appreciate the very low interest rate. Years to pay back.

USA Housing bubble repeat is not yet in gear.

Fannie and Freddie were created as a type of government insurance to get banks to loan money for house loans. The law was changed in the 70s and 80s to partially privatize them so they could issue stock. Hedge funds (like Bear Stearn) dumped bad housing loans on Fannie and Freddie causing the stock to crash and leading to the housing bubble and economic meltdown of 2007. F&F has almost paid the government back and their stock is going through the roof. The same vulture capitalists that drove F&F into the ground now want to cash in on the profits. If this is allowed to happen, the race to the bottom will be worse than it was in 2007.

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My lack of trust in Lizzie started when she refused to take a side during DAPL protests and didn’t make a statement against until she knew what Obama was going to do. Her “I am a capitalist” statement further cemented my doubts plus she has never met a war appropriations she wouldn’t vote to approve. No matter how many policy statements she makes, she has done nothing to assuage my feelings that she is just another Hopey-Changey Obummer neolib who will work with Chuckles, Pelosi and Hoyer to maintain the status quo.

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It may not be in high gear yet, but this piece suggests the Munchkin has a hand on the stick shift and a foot on the clutch pedal while the Chump works the starting tree.

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Thank you Sen Warren for calling out the media on light bulbs and straws–and thank you Sen Warren for making it clear that corruption is the number one issue------and thank you Sen Warren for recognizing that we all have a right to clean air , water ,-------of course you should use the real word------the COMMONS-we all have a natural right to clean air, water, land and natural resources beyond the power of the state.

THAT is why they tolerate, support, ignore and make excuses for him. He’s ‘producing’ for them. He’s also disposable to them and he doesn’t get that.

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In the 90’s I used to say “He’s out Republicaning the Republicans” and laugh when Newt was forced even farther to the Reich. It didn’t connect in my pea brain, back then, that all of that was a bad thing. My bad.

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Yes SHAMEFUL! I lost all respect for Liz in 2016 when she backed a Wall Street Whore over Bernie Sanders.

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You know how the Grand Canyon came to be? A capitalist dropped a nickel into a gopher hole.

As the right shoots further right ideology morphs into greed. Greed props up capitalism, and fascism waits at the goal line.

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And proves that the Dem leadership is either complicit or blitheringly incompetent. AND,
proves that our government is broken and unusable

Wall Street’s been dreaming of this large scale looting of public assets for years. Fannie = $3.4 trillion in assets.

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I would guess they (the dems) are reluctantly complicit.