Freddie Mac bets against homeowners
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Do you believe that Freddie Mac’s investment in inverse floaters is ethical? Total Voters: 93
Freddie Mac (Freddie) waged billions of dollars that homeowners with expensive mortgages would not refinance their home loans at lower interest rates. These bets were in the form of inverse floater deals, which Freddie made while at the same instant restricting the ability of homeowners to refinance by hitting them with additional risk-based fees and rules.
Inverse floaters are securities backed by interest payments and have the potential of paying a higher return than the rate of interest – provided the underlying mortgages are not refinanced. These are contrasted against securities backed by principal, which pay a low return but are a safer investment and less volatile.
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About The Author
Carrie B. Reyes
is lead writer in charge of the Real Estate Practice and Due Diligence and Disclosures books.
![iStock_000019083290XSmall[1]](http://firsttuesdayjournal.com/wp-content/uploads/iStock_000019083290XSmall11-106x75.jpg)
![property-disclosures1[1]](http://firsttuesdayjournal.com/wp-content/uploads/property-disclosures11-106x75.jpg)
This is like shorting a stock BEFORE you make the company look bad financially. What a system!
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Where is the outrage!?! It’s not enough to say “For now, there is little we can do except to shake our heads and wonder: what were you thinking, Freddie?” Where is the media in this? Too busy bashing Wall Street to expose the real culprits?
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Obama is giving his friends of Black Rock Group, Wellington Management, Magic JonhsonMuslim brother-hood (got 20 billion in 2011) all of Fannie and Freedie assets. while we are day dreaming they are having a ball. REDISTRIBUTION OF WEALTH AT ITS BEST. they become trillionaries, while we inherit the debt, isn’t it how it works?
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WHAT IS HAPPENING TO AMERICA please somebody help me understand i’m scared of the future and bleeding to death financially. I NEVER HAD THIS FEELING BEFORE IN MY AMERICA,. OBAMA HAS BEEN VERY SUCCESFULL IN HIS AGENDA OF COLLAPSING AMERICA.
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The most basic underlying problem is that the entire judicial system has been corrupt for many, many years. Thereby allowing increasingly blatant criminal activity of government representatives, employees and their manipulators.
Although there is constant news of scandals and supposed “investigations, prosecutions etc.”, these events are actually more to benefit the participants (with steady employment) and to punish the occasional competitor or whistleblower.
Nobody at Freddie has “accidentally” made a “mistake” other than getting caught at actively working AGAINST the exact mission for which they’re supposedly being paid.
Evidently, the American public has been so thoroughly brainwashed for so long by the government and their media cronies into believing what they are told, regardless of how severely such nonsense conflicts with established reality, that the crooks and miscreants are confident that they can do virtually anything without suffering any adverse consequences.
As an example of pervasive brainwashing, even though this audience is composed of readers relatively knowledgeable regarding real estate, I suspect that the vast majority incorrectly believe that it is POSSIBLE to actually OWN real estate in the U.S.
However, if you must make constant payments to someone else in order to keep possession of an item (including real estate), you obviously are RENTING the item, NOT OWNING IT. Even with NO MORTGAGE, in order to keep possession of real estate, constant payments must be made. These RENTAL PAYMENTS are usually called “PROPERTY TAXES” (and there may possibly be additional rental payments called other things as well).
Although someone who “only” has to pay “property taxes” as their RENT usually has better terms than other types of tenants, the BOTTOM LINE is exactly the same. If you don’t pay the TRUE OWNER your rental payments, the OWNER will use force to take back ITS property and RENT it to someone else.
Did anyone ever point out this aspect of United States capitalism in any of your classes in school?
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