Archive for the ‘Mortgage Financing’ tag
Paulson Encourages Covered Bond Market to Increase Mortgage Financing
Treasury Secretary Henry Paulson said Monday that
covered bonds are an answer to financial market’s request for clarity. He
said covered bonds, a $3 trillion market used widely in Europe for
mortgage funding, can develop without legislation in the U.S., and four
of the largest U.S. banks are already prepared to set up the market.
“I believe covered bonds have the potential to increase
mortgage financing, improve underwriting standards, and
strengthen U.S. financial institutions by providing a new funding source
that will diversify their overall portfolio,” Paulson said.
Even CNNMoney Gets it Wrong [Mortgage Industry Blog]
Chris Isidore, CNNMoney.com senior writer is confused. In his overheated article The Trillion Dollar Mortgage Time Bomb he claims that Fannie Mae and Freddie Mac “back” loans when in fact they serve as clearinghouses. “Backing” implies some sort of insurance or guarantee, like FHA’s. Additionally, he claims that conforming loans are characterized by “large down payments.” In fact, here is the entire ill-considered sentence: “Fannie and Freddie primarily back so-called conforming loans, those made to borrowers with good credit and large down payments.” Then he continues with the florid and frightened prose: “Among the nightmares lurking around the corner for the already battered housing and credit markets would be a meltdown at mortgage financing giants Fannie Mae and Freddie Mac.” God, I’m shaking in my shoes…
When a “senior writer” for a financial news site can’t even get it right it’s no wonder the general public is so confused… This kind of ignorant hysteria is what makes people so afraid of buying homes or borrowing money these days. We can only hope that cooler heads will eventually prevail. CNN should pick up writers like Dan “The Mortgage Reports” Green or Liz Freeman “The Daily Pick” if they don’t have anyone more knowledgeable than this guy on their staff.
