By giving lenders some assurances that Fannie Mae and Freddie Mac aren’t going to make them buy back mortgages at the drop of the hat, federal regulators are essentially saying, “Go ahead and lend; we’ll hold the paper,” writes David Weidner, who covers Wall Street for MarketWatch.
“But in trying to ease credit and turn a mythic housing recovery into a real one, the FHFA may be overreaching,” Weidner says, “because you know exactly who’s going to be taking out those loans: people who can’t afford them.”
Weidner acknowledges that “risky and often deceptive practices of big banks and brokerages, along with the inept efforts of regulators, usually take a pounding in this column.”
But consider this: Robert Toll, founder and executive chairman of luxury homebuilder Toll Brothers Inc., this week called a related proposal to let Fannie and Freddie buy mortgages when homebuyers put down as little as 3 percent, “a really dumb-ass idea.”
Yes, the housing recovery’s been slow, but it looks like it’s going to continue, Toll said, so “Why do we want to go do what got us into this problem in the first place?” The Wall Street Journal’s Kris Hudson reports.
Commenting on a story about the Federal Housing Finance Agency’s plans to tweak regulations, Inman News reader Todd Manno says, “This is both exciting for real estate professionals and scary as hell for the country. My income may double as a result, but the real estate bubble will definitely return. Oh well, my business has always been feast or famine.” Source: marketwatch.com.