I remain fascinated by the Fannie Mae/Freddie Mac train that is continuing at break neck pace to God knows where. These quasi government agencies took over a foreclosed property about every ninety seconds over the past three months. www.nytimes.com/2010/06/20/business/20foreclose.htm
They now own 163,828 homes across the United States. Most of the properties are being “bought” from bankrupted owners and are being resold at bargain prices. The American taxpayer at some point, will make up the difference. While there is little to be gained from the old “what if?” game, it is hard not to wonder what the current landscape might be if FDR didn’t initiate this “tool” to help Americans buy their own homes in the first place, or if it wasn’t dolled up by the Eisenhower or Lyndon Johnson administrations. It remains responsible for the vast majority of home ownership in the US because it essentially “guaranteed” local banks that their local mortgage loans would be made whole in the event of foreclosure.
We accept home mortgages as a necessary part of the modern landscape, and we forget that mortgages are not accepted as readily around the world. Is Syria, for example, mortgages are unheard of, yet home ownership is possible for the average contractor or business owner. My intention is not to hold Syria up as a model country by any means, but just to illustrate how deeply entrenched the idea of government backed mortgages is in the US. Americans accept the notion of a mortgage as though the idea came directly from the mouth of God. I just wonder what life might be like if the government never got into the business to begin with.
By Myron Gushlak
