Freddie and Fannie Hit Home
I have pretty good credit. I make a pretty good salary. I live in a nice house. I don’t anticipate having much trouble riding out this recession. Then, today my wife got a call.
Mrs. Geek?
Yes?
This is your mortgage company. We are calling to talk about your Home Equity Line of Credit.
OK…
We are reducing the available credit from 70K to 10K due to the problems at Fannie Mae and Freddie Mac?
Huh?
Thanks for your time.
Click.
Are you kidding me??? Geez, LG, now I’m afraid to answer my phone.
Interesting. Did the value in your house go down a lot?
At least they did it before an election…..
If they had thought better…….
We’d be screwed…..
So I thinking of this thread buster on the other side’s political blogs….
“blah, blah, Obama sucks,blah, drill baby drill, blah, liberal MSM, blah,”
“My home equity dropped $60,000 because of Republican policy…..”
“blah, blah, Obama sucks,blah..drill baby……”
Oddly, no. It wouldn’t appear so, based on recent sales prices. A home just went on the market in my neighborhood for 140k more that I paid…
Suck it up, ya whiny little brat!
By the way, did you know I was a POW?
Yeah, kavips. I would guess, also, that most of my banks customers are red state residents…
I’m no economist but I just don’t see the connection between Fannie/Freddie and HELOC. I can see it as a part of general credit tightening… Perhaps they were just using it as an excuse so you wouldn’t get mad at them.
Maybe. I can’t imagine why. They offered to lock in the current variable rate at 4%, so that’s not bad. But I have had no credit issues. I just wonder if they carry that unused credit somewhere and they needed more equity. So people that aren’t frequently using the credit, lose it.
I blame the Democrat congress.
I blame Chuck Schumer. I keep giving out his address to everyone and telling them he’s got their money.
Lg, I have another theory, similar to yours. Rates may come down a bit due to the bailout, but they will not approach 4%. The lender is pulling in to prevent you, and many more like you from taking your available line at this low rate, and maybe defaulting on them. Before, it didn’t matter, because they could sell the paper. Now, no one wants it even if the paper is good due to your good credit. Investors want a higher return.
I agree with Edison, they’re actually looking at the bottom line for a change. Reducing risk in this market is a good thing.
But following Edison and Brian S, if we were to agree that they were doing this to reduce risk, then the question would be–“whose risk?”
Our Chinese landlords?
On the other hand, LG, this would be a good time to check your credit reports for signs of ID theft and other fraud, and also to see if they have (or will within the next month) had indicated there that they downgraded your credit line.
Because what you said about not having any credit problems may no longer be true if they lower your line and then report that….
They must have driven by and saw the shag carpeting you installed. That’ll knock the value of your home down pretty far…
Heh….Don’t eff with me….
Top 5 Recipients of Fannie Mae and Freddie Mac Campaign Contributions, 1989-2008
1. Dodd, Christopher D-CT $133,900
2. Kerry, John D-MA $111,000
3. Obama, Barack D-IL $105,849
4. Clinton, Hillary D-NY $75,550
5. Kanjorski, Paul E D-PA $65,500
Wait, Kate…..that info has to be wrong.
Provide a link. Because those figures seem small for a 20 year time period (1989–2008).
Those figures do seem small.
But one very small bright spot is that the legendary lobbying by Fanie and Freddie are supposed to be over. At least until they get out from government bailout.
Looks like the numbers are correct:
http://www.opensecrets.org/news/2008/07/top-senate-recipients-of-fanni.html
But the F & F boys seem to spend most of their money in lobbying rather than direct campaign contributions. They also seem to lobby with whichever party has power at the time (at the same link):
“In the 2006 election cycle, Fannie Mae was giving 53 percent of its total $1.3 million in contributions to Republicans, who controlled Congress at that time. This cycle, with Democrats in control, they’ve reversed course, giving the party 56 percent of their total $1.1 million in contributions. Similarly, Freddie Mac has given 53 percent of its $555,700 in contributions to Democrats this cycle, compared to the 44 percent it gave during 2006.”
Thanks Shirley. I thought the numbers were too low.
I blame Christine ODonald.