While the press has been excited by a recent uptick in home sales, much of the activity can be directly tied to an incredibly irresponsible federal mortgage program that puts the prior Fannie Mae and Freddie Mac shenanigans to shame.
This next article, from the WSJ online edition, needs to be quoted from extensively, because it is so packed with essential information.
Ginnie Mae and FHA are becoming $1 trillion subprime guarantors.
AUGUST 11, 2009
Much to their dismay, Americans learned last year that they “owned” Fannie Mae and Freddie Mac. Well, meet their cousin, Ginnie Mae or the Government National Mortgage Association, which will soon join them as a trillion-dollar packager of subprime mortgages. Taxpayers own Ginnie too.
Only last week, Ginnie announced that it issued a monthly record of $43 billion in mortgage-backed securities in June. Ginnie Mae President Joseph Murin sounded almost giddy as he cheered this “phenomenal growth.” Ginnie Mae’s mortgage exposure is expected to top $1 trillion by the end of next year—or far more than double the dollar amount of 2007. (See the nearby table.) Earlier this summer, Reuters quoted Anthony Medici of the Housing Department’s Inspector General’s office as saying, “Who would have predicted that Ginnie Mae and Fannie Mae would have swapped positions” in loan volume?
Wait a minute…where is Ginnie Mae getting all this loan volume from?
by rickets