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The Water Cooler
General Discussion
Freddie Mac Betting Against Struggling Homeowners
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<blockquote data-quote="Dave70968" data-source="post: 1707729" data-attributes="member: 13624"><p>The ability to refinance is a natural, positive consequence of a free market: when lenders can compete on equal terms, if one lender is willing to go lower than another, the borrower wins. Fannie and Freddie distort this market; they own or guarantee upwards of 90% of mortgages (depending upon your source), so the competitive aspect is destroyed. Fannie and Freddie are backed up by your tax dollars, so they have no moral hazard--they're free to take big risks, knowing that they'll keep the profit if they win, and be covered (again, by your tax dollars) if they lose. As a result, the system is now stacked to bring harm to the people most in need of help, at a time when help should be most available (low interest rates).</p><p></p><p>Get the government out of the financial system!</p></blockquote><p></p>
[QUOTE="Dave70968, post: 1707729, member: 13624"] The ability to refinance is a natural, positive consequence of a free market: when lenders can compete on equal terms, if one lender is willing to go lower than another, the borrower wins. Fannie and Freddie distort this market; they own or guarantee upwards of 90% of mortgages (depending upon your source), so the competitive aspect is destroyed. Fannie and Freddie are backed up by your tax dollars, so they have no moral hazard--they're free to take big risks, knowing that they'll keep the profit if they win, and be covered (again, by your tax dollars) if they lose. As a result, the system is now stacked to bring harm to the people most in need of help, at a time when help should be most available (low interest rates). Get the government out of the financial system! [/QUOTE]
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Freddie Mac Betting Against Struggling Homeowners
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