Wrangling Over Government's Role in Mortgages Continues
Since the financial crisis, Fannie Mae and Freddie Mac have used over 170 billion in taxpayer money to write off bad mortgage loans they possess, and their requests for more funds have come to be expected every quarter for the last 3 years. Now what's strange about this is that it doesn't seem like anyone in Congress thinks Fannie and Freddie should even exist anymore.
Democrats want to give them the boot, but believe that the housing market cannot sustain itself without continued government assistance - and it certainly is true that artificially record low interest rates would not be sustainable without the FHFA entities. Republicans maintain that government intervention has made the housing crisis worse by preventing private institutions from bringing back balance to the markets.
However, Congress seems to bring up this issue ever couple of months without making any steps forward. This is quite possibly due to the fact that government intervention, private lending institutions, and the free markets all played a part in destroying the housing market and plunging the global economy into paralysis.
The Hard Choice
Of course anyone that works in finance, and finance law, understands this kind of gordian knot perfectly well. When a person or entity is burdened with a truly unsustainable amount of debt, there is only bankruptcy or default in their future. The continued bailouts of the financial sector have staved off default for Fannie, Freddie, and a host of other institutions - but no politican or banker have another card to play.
It's been an excrutiatingly drawn-out process, but Greece, after two failed bail-outs, is finally on the cusp of default - after years of numbers that didn't add up and politicians who tried to pretend otherwise. Their debt has consumed their GDP and threatens to ruin countless lives as a result and destabilize the whole nation.
As a law firm unattached to a government sponsored entity or political interest, we get to deal with similarly realistic expectations. Homeowners that can't pay their mortgages either need to restructure or move out. People swamped with credit card debt need to settle with their debtor or declare bankruptcy. We don't phone the Federal Reserve for a loan.
If your lender's malfeasance is dragging you into an equally unsustainable financial situation, then get a consultation from Amerihope Alliance Legal Services. We'll present what realistic options are available to you, and we do everything we can for our clients to realize those possibilities.