Don't kid yourself, Shumer wants a bailout. He wants Fannie Mae and Freddie Mac to guarantee riskier and riskier mortgages. Just because it's guaranteed by Fannie or Freddie doesn't make it a safe mortgage if you change the qualifying criteria. Does he think we're stupid? Answer: yes, he probably does, that's why he came up with this proposal.
The reason foreclosures are skyrocketing is that buyers face payments which eat up a higher and higher percentage of their income. Geez, what does income have to do with home prices? Oh yeah, everything.
So you're still going to get the same default rate even if you raise the loan limits or loosen the qualifying criteria of Fannie and Freddie.
But if a homebuyer defaults on a Fannie or Freddie mortgage it's YOU, the taxpayer, who is stuck with the bill. But wait a minute, Fannie and Freddie aren't actually formally supported by the US Govt. No, but a Democratic congress and Federal govt is guaranteed to bail them out. So ultimately, you're holding the bag, you're Shumer's own personal money tree.
Sound good? Sound like something you want to support? Sounds like a real winner, huh?
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