Gee, I thought America was a free market economy who believed in the sanctity of contracts. My bad. I forgot, the Democrats are in charge now. And the investment banks want to see a return on their DC investment.
In the end, all of this crap - Dodd's RTC2 plan, Clinton's 5-year interest-rate-freeze stupidity, and the goings-on with Fannie, Freddie and FHA, just show how important housing prices are to America and our fake Ponzi Scheme economy.
When home prices were shooting to the moon and detached from price-to-rent and price-to-income metrics, nobody in government said boo. But prices start coming down to rational levels, and EVERYONE FREAKS THE F*CK OUT.
Memo to the monkeys in DC - LET THE FU*KING MARKET CORRECT. When home prices are at levels that people can't afford, people don't buy homes. Get it? And housing gamblers who committed mortgage fraud and bought homes they couldn't afford SHOULDN'T BE IN THOSE F*CKING HOMES.
I swear, housing is the new Terri Schiavo. The boobs in DC just don't get it.
Dodd Wants Government Housing Corporation
WASHINGTON, D.C. - U.S. Senator Chris Dodd in a letter to Senate Majority Leader Harry Reid called for the creation of a government housing corporation to ease the housing crisis, which he likened to that of the Great Depression.
The corporation would “purchase outstanding mortgages at the steep discounts at which they are currently valued in the marketplace, ensuring that lenders and investors take a haircut and are not being bailed out.
The discounts would then be passed on to homeowners in the form of new, lower-balanced mortgages insured by FHA or backed by the housing government sponsored enterprises (GSEs), Thus, the program would take advantage of the existing mortgage distribution system.
Dodd proposes $10 billion to $20 billion for initial capitalization of this corporation.