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Government role in home ownership

August 17, 2010 By seascraper

Forced to listen to Diane Rehm show today on home ownership, Fannie, Freddie etc. The show was very boring but I thought some points could be related to our ongoing discussions about the middle class etc.

http://thedianerehmshow.org/sh…

Sarah Rosen Wartell from the Center for American Progress repeatedly brought up the point of the unpredictability of interest rates for borrowers. She said it was vital for borrowers to know what they would pay in five years, which they can’t do with an adjustable rate mortgage. In her opinion a completely private market would eventually give up offering long-term fixed rate mortgages.

I agree. I do not understand how those who condemn borrowers expect them to know what their rates will be in the future on the basis of the behavior of the Federal Reserve Board of Governors.

Before the dollar was delinked from gold in 1972, the Federal Reserve did not have to use interest rates to hit a separate monetary target or employment target. It is no accident that interest rates were far more stable during that time and home ownership was much less of a gamble.

More government involvement to provide long-term mortgages however simply leaves the taxpayers to cover the spread. Left alone, people will not borrow as now they understand that their mortgages could always be hit by lighting in the form of some Fed action that they have no way to anticipate and no control over. This is hardly confined to mortgages though.  

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Filed Under: User Tagged With: diane-rehm, fannie-mae, federal-reserve, freddie-mac, home-ownership

Comments

  1. roarkarchitect says

    August 17, 2010 at 8:49 pm

    With only a 5 year fixed interest rate, prepayment penalties and recourse.

    <

    p>“So how is Canada doing? As of March, 0.44% of Canadian mortgage borrowers were three months or more past due on their loans. In the U.S., the rate was 9.5%. Canada’s homeownership rate, about 68%,  is roughly equal to ours.”

    <

    p>and interest isn’t deductible.

    <

    p>

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legislataapp Legislata @legislataapp ·
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Tweet summary for MA State House for 2023-01-29: 87 tweets from 30 legislators. Top words: police, housing, boston, senjehlen, repdaverogers, samvmontano, mikeconnollyma, morning, violence, 15. #mapoli

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bostonianrap Bostonian Rap @bostonianrap ·
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How much time have you spent in #Cambridge, Massachusetts? If I had not commented on the Sayed Faisal case, would you have done it? Be honest, @rasheednwalters. #mapoli

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In the People’s Republic of #CambridgeMA politicians, comrade citizens, and far left activists expect a officer to not defend themselves against a man charging at them with a Kukri Knife which is akin to a machete. These people are insane! They all wanted that officer to die!

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bostonianrap Bostonian Rap @bostonianrap ·
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I will say this for the @JimLyonsMA crowd - They are quick to weigh in on the events that others first highlight, without adding insight or offering any solutions. Isn’t that right, @rasheednwalters? 😉

#mapoli

Rasheed N. Walters @rasheednwalters

Walters: Left quick to make assumptions about Cambridge cops. #bospoli #mapoli https://www.bostonherald.com/2023/01/28/walters-left-quick-to-make-assumptions-about-cambridge-cops/

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ronaldvining Ron Vining @ronaldvining ·
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🇺🇸🐘📢 MUST WATCH! Candidate for MA GOP Chair, #RonVining, to host 3rd "Fireside Chat" with #MassGOP State Committee Members about "The #Future" of #MaGOP State Party via @YouTube.
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ronaldvining Ron Vining @ronaldvining ·
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🇺🇸🐘📢 MUST WATCH! Candidate for MA GOP Chair, #RonVining, to host 3rd "Fireside Chat" with #MassGOP State Committee Members about "The #Future" of #MaGOP State Party via @YouTube.
https://www.magopchair.com/ron-vining-to-host-final-fireside-chat-with-massgop-state-committee-about-the-future/
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livinthetruth1 Officer Brenda James @livinthetruth1 ·
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Gun violence is rampant in our community! Transparency is a beginning. Change won’t happen when an injustice is normalized for any reason. Mishandling a firearm is violent- it can discharge fatally. 12 years defending that a loaded firearm is dangerous is too long #mapoli

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https://www.wcvb.com/article/deadly-daytime-shooting-mattapan-boston-massachusetts/42698162

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