Tag: FHA

Bernanke Asks Taxpayers To Bail Out Banks

If you were used to doing nothing, what would you do?

You’re on the board of a couple of big companies. Their business is investing in home mortgages, and you force them to be moderately picky about what they buy. It can’t be too big, and must garner a sufficient rate of interest over a sufficient length of time. You also subsidize these companies through loan guarantees – it’s the only way anyone will buy their debt. Meanwhile, the companies’ management really has your ear because they take you out on the town a lot, and their private-sector brethren foot the bill.

By the way…how are those companies of yours performing? Well, they’re losing tens of billions of dollars each quarter, with little end in sight.

What do you do?

A) Nothing, and let the markets weed out all the garbage over the next two years or so
B) Recommend getting rid of all their analysts, and go party with the CEO
C) Vote for a top management shake-up, and go party with the private-sector folks
D) Relax their investment restrictions, giving them yet more avenues to lose their investors’ money

It’s a tough call. But if you picked “D” you’ve won!

Countrywide CEO – Selling shares and pitching bigger subsidies

You can’t make this stuff up.

Via Reuters:

Countrywide Financial Corp Chief Executive Angelo Mozilo sold some of his shares in the No. 1 U.S. mortgage lender to handle matters relating to his estate and retirement, former Countrywide board member Henry Cisneros said on Fox Business Network on Wednesday…

Mozilo has realized more than $100 million of gains in the last year since he began selling shares on a regular basis last October, just as the U.S. housing market was cresting. He later accelerated the pace of those sales twice.

Meanwhile

Countrywide Financial Corp’s chief executive called on the U.S. Congress to temporarily raise the maximum size of mortgages that Fannie Mae, Freddie Mac and the Federal Housing Administration may buy or insure by 50 percent to $625,000…

Any increase in the cap should benefit Countrywide, which now primarily makes home loans that Fannie Mae and Freddie Mac can buy.

Admittedly, the stock needs help.

UPDATE: Adding insult to injury, the company is still promoting low-money-down loans. What the heck – someone else takes the heat anyway.

UPDATE 2: More suffering, and more predicted, from the very ones now being hornswoggled into picking up the “slack.”