ECONOMY: Paulson on Congress & the Stimulus Package

[quick1kungfu]

Portfolio Pollution_FIRREA helps lenders - not buyers. So much of the headlines today talk about the mortgage mess and how countless numbers of borrowers are nearing foreclosure. Sure, the government and Treasury Secretary Paulson have made efforts to curb the rising tide of foreclosures for all borrowers in financial trouble (not just sub-prime) and that's a great start.

[quick1kungfu]

But how in the world did housing prices rise to such an astronomical level in the first place? Who fell asleep at the wheel regarding over-inflated real estate appraisals? Did regulation created under the Financial Institution Reform, Recovery and Enforcement act (FIRREA) created after the Savings and Loan crisis do more to help lenders loan money and almost nothing to protect borrowers from overpaying - YES!

[quick1kungfu]

Were appraisers feeling pressure by lenders to support the 'target' price (aka loan amount) given to them in advance by the lending institution - YES!

[quick1kungfu]

The parallel investor and speculation market put undue upward pressure on prices. We know this for a fact! Every time a home was 'flipped' it served as a basis for a new 'comp' and the process repeated itself. Home prices were propped up just like building a house of cards. Now taxpayers will have to fork over more of their hard earned money so that the GSE's (FNMA & FHLMC) can bail out banks - are you kidding me?

[8data]

quant man

[yourvalet]

SSS