Everett Mortgage GSE Bailout Will Harm Seattle Mortgage Co

Author: James A Johnson

Author: James A Johnson

Everett Real Estate Will Be Harder to Finance Mortgage lenders and Everett real estate will see more difficulties in obtaining home loan financing. When the Treasury Department lifted the debt ceiling for Fannie Mae and Freddie Mac (GSE or Government sponsored entities) the Obama administration just made you liable for Hundreds of BILLIONS of dollars in more debt. Yes the most transparent administration yet did this on Christmas Eve hoping you wouldnt notice it. Ill just bet you didnt know you had already bought $111 BILLION of GSE preferred stock did you? Back in September 08 the Bush administration at least put a $200 BILLION ceiling on the debt. Now Obama has lifted that to least $400 BILLION. $400 BILLION would buy a lot of Everett real estate. But really there is no statutory ceiling. Preferred stock must be paid dividends but in order to pay those dividends (to you the new stockholder) they now have to borrow the money (from you the taxpayer) to pay you the citizens of America dividends. Sound like a cluster you know what? Now why do they need to borrow more money when they didnt spend the original $200 BILLION? Good question. They did it because the Treasury Department has directed the GSEs to invest in bad money losing strategies in loans modifications. The same loan mods that are impeading the recovery. The same loan mods that are actually hurting the borrowers. Do you remember Enron? The energy company that had BILLIONS in bad off the books investments. They were off the books so the stockholders and bankers couldnt see how bad the financials really were. Ill be you guessed it already. Yup the GSEs are keeping the bad debt loan mods off the books. That is so our political class doesnt have to tell you they are now starting ANOTHER REAL ESTATE BUBBLE. This is why mortgage lenders and Everett real estate will see more difficulties in obtaining home loan financing. Soon nobody in their right mind will invest in a mortgage backed security (MBS). If no one will buy a MBS then there will be no money to finance homes for sale Everett. This is all being done to try and keep the democrats in power in Washington, D.C. Since the Treasury Department has announced that as of the end of March 2010 they will no longer buy MBS I can see how the real estate market will tank on April 1st (great timing). Now because there is no ceiling on the GSEs debt they can replace the Treasury Department and keep the market going at least until 2012. Ill bet you can think of at least one thing scheduled to happen in November of 2012. And Ill bet you didnt know that Barney Frank and Chris Dodd have another surprise for you, the taxpayer. Thats right more debt. Soon the national debt will dry up all funds for any Seattle Mortgage Companies. Mortgage lenders and Everett real estate will have no money and we will have another major crash. Everett-mortgage-on-lineAbout the Author:

Jim Johnson E.A. retired; (Enrolled Agent, licensed to practice law in tax court) BS University of Wisconsin, Milwaukee, Mortgage loan originator 1993: Century 21 Real Estate agent since 1995, Viet Nam vet.

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