What a field day for the heat
A thousand people in the street
Singing songs and carrying signs
Mostly saying, "hooray for our side"

Wednesday, November 2, 2011

Who mourns for Adonais? Fanny Mae and Freddie Mac.

Okay, officially tired of the meme of Fanny(Mac) and Freddie(May) was forced by Congress to make "imprudent" loans and that's what lead to the economic doom that was 2007-2009 (ie. our latest recession and the implosion of the construction industry and everybody's job).

The thing is, Fanny and Freddie default rates overall are less than 3% (for some origination years it's over that, 2006/2007 originating loans are almost 4.5%). That's for all the mortgages F&F bought/originated/secured. In 2008 their default rate was less than 1.15%, when other mortgagers were facing default rates of "1.47 percent for prime mortgages, 8.35 percent for Alt-A mortgages, and 20.74 percent for subprime mortgages" at the same time.

Where are those other mortgager's now? Well, here's one that thinks with a 5.3% default rate they're doing ducky. As of Jan 31 of this year, 8.9% was the going statistic for those that report to the FHA. Granted, F&F accounts for 50% of all home loans in the US, so that less than 3% is a relatively large number of people, but as an overall business, they are still in fracking' fantastic land.

So, yeah, it's not Frannie and Freddie's (or Congress') fault. Anyone still flogging this desiccated horse carcass is intentionally lying to you.

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