The bill proposed today by Democratic congressmen who serve on the House Committee on Financial Services is quite possibly one of the most hare-brained schemes to date. Since the bill is not yet named, I would respectfully suggest “The house of cards.” Like all the bills before it, it sure seems like a lot of work to try to recreate Fannie and Freddie, who have been doing an excellent job doing what their bill would fail to accomplish. It would raise mortgage costs and push an exceedingly shaking housing market closer to the cliff. And when the housing market does go off another cliff where will we be without the Fannie and Freddie we know today? When all of the private capital flees the market who will be there pick up the pieces as Fannie and Freddie did the last time?
“So how does one of the bills co-sponsors Delaney respond to those originators who say that any GSE reform will invariably make lending more expensive for consumers, “Who cares? I don’t believe that,” he snapped. Not quite the confident coolness we saw as politician after politician proclaimed our demise the last few years is it? They are feeling the heat of the court cases now that it is becoming painfully obvious they stand little chance of winning. They are also faced with the stark reality of having their entire flawed scheme exposed to the entire world. The bill was scheduled to be released in the spring yet they waited till July 4th week? This was no coincidence; this is part of a concerted effort to try and influence the Judges in our court cases. I have been observing this pattern as the clock ticks closer to judgement day.
This bill stands no chance of being passed, but If we were lucky enough to be fully released as they suggest the sky would be the limit. Fannie and Freddie have decades of experience in the mortgage and housing market. They have pools of incredible talent, the best of the best.This is why we see the biggest and brightest hedge funds jockeying for a piece of them. If completely free we would no longer be chained to the federal government.For decades Fannie and Freddie were forced to comply with every demand they made, dragged about with their every passing whim. Let me be clear, Fannie and Freddie would smash even the rosiest share price projections if made fully free. They would dominate any new mortgage market the government tried to create. Most importantly though they could unleash their well oiled machine into any sector of the housing market they wished. We would quite simply become the Apple of housing. Keep the faith!