Fannie Mae and Freddie Mac announced that they will be loosening the penalties they impose on mortgage originators. A deluge of mortgages defaulted during the great recession, resulting in the current regulations designed to help resist a repeat. Much of the tougher rules govern percent of market value that can be mortgaged, income to debt […]
mortgages
Regulatory Expansion via “Too Big to Fail”
When we can, consumers save for a house, for retirement, for college, or for unexpected expenses. Savings sometimes molder in bank accounts, but wise savers use a portfolio of certificates of deposit, mutual funds, common stocks and bonds. In the depths of the housing-finance recession, the federal government loaned billions to mortgage-lending banks they deemed […]
The Real World Quest for Mortgages
Before Dodd-Frank, banks faced strong pressure to lend so that more people could own a home regardless of their ability to repay. Dodd-Frank will spawn byzantine regulation enacting bank capital requirements, retention of 5% interest in securitized mortgages and other mortgage reforms. Most regulations required under Dodd-Frank have yet to be proclaimed, so banks are […]
Banks as Owls
A centipede was foot-weary from all the walking it had to do to get to work and back. It stopped near the owl’s tree, kicked off its many shoes, and asked the owl for wise advice. The owl looked thoughtful and replied, “Hmm… you should fly.” The centipede asked “Well, how should I do that?” […]