Banking execs say gov't needs to back mortgages

They don't want government involvement, unless its for their own benefit. Without government backing of loans, many borrowers woudl be too risky for the banks to loan to them. TOO MUCH RISK FOR THE BANKS, BUT THE BANKS ARE WILLING TO MAKE A PROFIT IF US TAXPAYERS WILL CONTINUE TO ACCEPT THE RISK.

What is Timothy Geitner's (and many others in government) fascination with rising home prices? It is obvious that he knows government backing of loans artificially inflates housing prices -- he essentially admits it at the end of the article. If we refi all these loans, house prices would rise 10%. In the end, the house buyers will end up paying the same per month regardless whether they have a high interest rate on home priced low or a low interest rate on the same home priced higher. This is ridiculous

From the Article:

The Obama administration invited banking executives Tuesday to offer advice on changing the government's role in backing the mortgage market. While they disagreed on the exact level of support needed, the group overwhelmingly advocated for the government to maintain a large role in the $11 trillion market.

If the government pulled out, millions of Americans wouldn't be able to convince banks to take the risk of giving them home loans, the executives said. Ending government support could lead to a spike in mortgage rates. That could deter many from buying homes, and banks, mortgage lenders and Realtors would lose money over time.

. . . .

"There would be a lot of homeowners who wouldn't be able to afford homes because we'd be dealing with higher interest rates." said S.A. Ibrahim, chief executive of mortgage insurer Radian Group Inc.

. . . .

Refinancing those loans at the lowest mortgage rates in decades would give Americans more money each month. That would boost consumer spending by $50 billion to $60 billion and lift housing prices by as much as 10 percent, said.

http://finance.yahoo.com/news/Banking-execs-say-govt-needs-apf-1176865107.html?x=0

:sarcasm:

Student loans are backed by the Gov't. The banks can't lose.

Socialize the risk, privatize the profit. There is a name for this.

Since the beginning of the subprime market, the securitization of debt, whether mortgage, student loans, auto loans, whatever, has depended on increasing prices. When the prices drop, the veil falls from the ponzi scheme that has developed around all that, and the banks and the government must collude to keep the banks functioning. Else the bankers lose their jobs and we have to have new people take over who are not rewarded for reckless behavior, which would be a poor reward for the 30 year campaign of the banks to place people in government positions from which they can influence policy, purchase sympathetic politicians, remove the regulations that were put in place after the Great Depression, and work towards teaching the culture that greed is good.

People in the financial sector know there is nothing left if finance loses it's cloak of invincibility. Housing and consumer spending has been hiding our decline as the manufacturing sector has become a shadow of its former self. If we can be convinced to work and pay taxes which can be transferred to the financial sector while they invest in developing nations, (since that is going to be where future profits are), we make a slow downgrade in our standard of living, increases in unemployment, and the financial sectors takeover of our economy continues to remain hidden off bank balance sheets, with mark-to-myth accounting and the shield of the Federal Reserve.

Without that, the floor comes out from under us as the currently hidden trillions of complex derivatives come unwound and our lack of demand shutters many remaining businesses, and we look around and find that half of our wealth is nothing more than air.

And at that point who knows what will happen?

Just guessin'...

our un-ending tax dollars? These bastards suck.

they're not on the market and they don't maintain the property.

just letting them rot. there are squatters in one.

i hate those sons of bitches & hope they loose their shirts.