I kind of liked the hybrid model of mortgage funding. The pure public sector doesn't do that well (FHA underwriting is not all it should be); the pure private sector also doesn't do so well (beyond the subprime mess, there is very little liquidity even in the prime jumbo market right now).
Where I was mistaken was to think 2.5 percent capital was sufficient backing for the GSEs--I thought home mortgages were so safe, that 2.5 percent plus a stress test would be OK. I was wrong. And it is becoming increasingly clear that the GSEs' managements were reckless with the charters, which gives evidence that Robert Van Order's powerful argument that GSE management would never want to screw up a wonderful franchise was also incorrect.
So maybe the correct answer is a hybrid with more capital--say 5 percent. After all, thanks for FDIC and the Federal Home Loan Bank System, Banks are really hybrids too.
Subscribe to:
Post Comments (Atom)
3 comments:
Never underestimate the power of "Heads I win, tails you lose"
20% down-payment like the rest of the civilized world. Euro homes are much smaller than here. Don't force people to buy more home than they can afford. Hybrid, yeah that too as part of the package.
What is the value of the asset in your local real estate market? If you don’t know the answer means just search for the clues by using the David Lindahl scam report. As the property values are changing day by day in a fast manner, you need to be aware of knowing the sale valve of the property. In this unstable world it is not a big thing for the property value to oscillate from $16000 to $25000 in a period of month. In case you buy a property and you thing to sell it then you can either lose or gain several amount of currency almost. So get more info about the current real estate property sale rate.
Post a Comment