This morning we learned that the first major quasi bailout of the 2011 crisis has begun, Bank of America has agreed to sell part of its home-loan portfolio to taxpayer controlled housing giant Fannie Mae. The 400,000 loans have an unpaid principal balance of $73 billion, Fannie Mae (taxpayers) are buying the rights to process and collect payments for more than $500 million. Now according to Bank of America, they gave the taxpayers a great deal, unloading loans that have a super high delinquency rate of 13% with more than half of all the loans located in troubled U.S. real-estate markets. By the way, Fannie Mae just last week requested another 5.1 billion from taxpayers in order to make up for continuing losses from supporting an unsustainable real estate market.
Freddie Mac recently requested an additional 1.5 billion as well, of course the Treasury Department is currently responsible for funding 90% of mortgages, so there is no doubt that the taxpayer funded giants will get more of our money. Experts love to say how we have to keep bailing them out or we would see a complete collapse in the real estate market, as if more affordable and sustainable housing prices is a bad thing. Ending the fraudulent housing market would be painful for those depending on the fraud, but for those who would actually like to OWN their home and not rent it from the bank, seeing prices decline to affordable levels would be a great thing.
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