The federal government has made some mistakes in the past – we all have. The GSEs that dominated the secondary mortgage industry (commonly known as Freddie Mac and Fannie Mae) have got to be at the top.
These are companies that are backed and secured by the federal government – my tax dollars and yours – and exempt from SEC oversight. It is estimated that their combined outstanding debts now total around 46 billion dollars and it is money that the taxpayers will have to pay if these companies have a financial collapse.
The more that I learn about the mortgage industry the more I know that it’s not any ONE person or group’s fault that there is a problem in the market place. People want what they want and they want it now. Lenders want to be competitive and want to make money and are competing against government backed organizations that have a virtual monopoly on a major sector of the mortgage industry. Lending practices and requirements have suffered from it all.
It’s time to tighten up and straighten up. The federal government needs to get out of the industry completely. People need to hold off on borrowing more than they can repay. And the lending industry needs to tighten up on terms and requirements.
If we will all come together we will come out on the other side in a better financial situation than we began.