10/27/10 Baltimore, Maryland – A zombie alert. Bloomberg has the report:
Chris Whalen is famous lately for predicting a return of the subprime crisis in 2011. His thoughts on the greater mortgage system are also interesting, as discussed in an interview with King World News.
Whalen says GSEs [Fannie Mae and Freddie Mac] don’t help homeowners. Rather they promote a system that locks marginal borrowers into costly interest payments, helping their own bottom line.
The zombies at Fannie and Freddie prey on house buyers.
We interrupt the normally crisp flow of ideas in these daily reckonings with a parenthetical remark. Looking through the newspapers and magazines this weekend we were offered thousands of “homes” for sale. We thought a home was something you lived in. But the ads offer “new homes” – empty houses that no one has ever lived in. It doesn’t make any sense to us. But we conclude that the word “house” has been withdrawn from the dictionary.
Yes, dear reader, the homing crisis in America only seems to get worse and worse. We remind readers too that this was a crisis created largely by the government – which subsidized mortgage rates (sponsoring Fannie and Freddie), provided a tax break for mortgage interest, and told banks that they had to lend to poor credit risks in bad neighborhoods.
And now, true to form…the government is making it worse. How? By bailing out failed lenders – Fannie and Freddie. The last estimate we saw put the cost of keeping these incompetents alive at more than a quarter of a trillion dollars. That is bad money after bad money, in our opinion. The Feds are also threatening to slow down the foreclosure process…which would further delay the correction in the homing market.
Now…Chris Whalen continues:
“If you’re a wealthy American you can [refinance], but if you’ve got a seven-something FICO score and you’re in a so-so neighborhood so the collateral doesn’t have a big score in the equation, you’re screwed,” Whalen says. “These are the people Fannie and Freddie doesn’t want to see prepay, so they can keep the income on their portfolio. It’s horrible! People don’t realize how predatory these government agencies are.
“Everything Orwell ever wrote was true and it’s proven by the way people like Barney Frank and Chris Dodd have personally benefited from this housing mess, while they’re actually hurting the poor people most.”
Regards,
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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why does frank raines who sunk fannie/freddie own the patent for the carbon calculator for green house gasses that was invented by Charlton Bartels who died on 9/11 along with 1167 (42% of the people killed on 9/11 were in direct competetion with Chicago Climate Exchange, Al Gore, Obama, Maurice Strong)and why Obama brother-in-law in the WTC 5 days before 9/11 working on the sprinkler systems that failed on that fateful day?? Was 9/11 a ploy to pass green house carbon bills so they could make trillions??
Things never turn out exactly as expected. In the case of empty detached single family “homes”, there will come a point in 2012 when having been vacant for 2+ years will be a selling point. Bed bugs can’t survive in empty houses for more than a year without a meal. These vacant pest-free homes will be some of the most sought after real estate. As the nations bed bug pandemic continues to unfold, many will flee multi-unit housing (both apartments and condos) in search of a domicile that can be defended. In fact, don’t be surprised if the entire foreclosure mess is totally eclipsed by a raging debate in the 2012 presidential race about bringing back DDT. If not bed bugs, then something else will change the topic of discussion in an earth shattering sort of way; –the Cubs winning the World Series or some other black swan event. I for one will be glad when it happens. The current mess is getting kind of old, just so very 2007, if you know what I mean…,,
if you buy a triplex and live in one its call occupancy own is this correct and if you buy a triplex but don’t live in it and just rent it out and it’s not title occcupancy own is it call investment property and if its forclosure on you title occupancy own do you write this off your taxs as it was a single home or as investment property or dose depend on how it was bought also can small invester that buy just duplex or triplex and end up loose it by forclosure cause of loan how can you get help on this matter when there process of forclosure was not done right and all you get is the run around
help me understand this with all this talk about stop these forclosure lets help these homeowner so they don’t loose there home
but it seem that everyone has forgotten the once upon homeowner that use to own a home but no longer cause of these forclosure what happen to them is any one going to help them there homes have been takeing away from them when the banks failed to help with there modification and lie who helps them if they fill there were treating un fair did everthing the banks said and still have there property taken away and sold on action WHAT Happens to them if they don’t have the money to fight this cause there told it cost alot because of ligation process how can they get a fair deal in this wrong doing process of forclosure
your told if you are all most in process of looseing your home will help you save it but as soon as you tell them you have lost it in forclosure that went bad these so call lawyers don’t want to hear it and tell you there nothing that can be done
But if you are at that point were your about to get a forclosure so you go to get help so the lawyer can see if he can help modifity say’s to thing will be fine don’t worry you trust them to help the befor you know it you lost it any way
why cause the job was not done right by the lawyer and you have paid them and all you get is a am sorry we did r best but you know they didn’t and you complaint about it to them and your only answer you end up getting is we did are best after they promiss you that everthing will be fine we will have this done 1or 2 weeks and then lie to the bank on some important issuse and then denid it when you know you have the proof but no money to fight them cause your the little guy what happen to them how do they get help on these issuse please tell me I want to know cause am this victim that fills that I was takening advanage of cause am a single mom young and I belive and trusted them to help and what they seen was property and money in there pocket
help care trust honest they say this and want you to belive they are helping the NEEDY but there the ones that are GREEDY
since this has happen I have wrote letters put in complate about this and still I read What can we do to help these homeowner from forclosure but forget about the ones that lost there home already what about them can you or any one tell me and please don’t say there programs that will help you cause there nothing on the issuse of what to do when you already lost your home but yet you know you have a case agains the bank that took it but no money to file a law sue to the f!!ken bank that took my home
Where is this article being posted? Odd comments this time.
Titigirl, you need some writing lessons.
“The zombies at Fannie and Freddie prey on house buyers.” House buyers are consumers and the business class and investor class and the corporation zombies prey on all consumers.
the business class and the investor class zombies prey on everyone.
Titigirl, a mobile home is the answer.
HUH?