Essay About Freddie Mac And Policies Of The Federal Reserve

Persausive Essay
Essay Preview: Persausive Essay
Report this essay
Persuasive Essay
Communications
The housing market or the housing bubble, which burst did affect everyone nationally and
local has been hit by the economy .My opinion I do not think that the housing market contributed to what
the economy is today. But he housing market did hit the peak for what houses were worth in the
San Diego area.( And this was all caused by the actions of lenders are directly attributable to the
policies of the Federal reserve when credit is cheap, why not loan money more recklessly to
individuals who normally would not qualify?) Even with higher default rates, lenders could make
huge profits simply through volume. Subprime lending is a symptom of the housing bubble, not
the cause of it.
Federal Reserve credit also distorts mortgage lending through Fannie Mae and Freddie Mac,
two government schemes created by Congress supposedly to help poor people. Fannie and
Freddie enjoy an implicit guarantee of a bailout by the federal government if their loans default,
and thus are insulated from market forces. This insulation spurred investors to make funds
available to Fannie and Freddie that otherwise would have been Invested in other securities or
more productive endeavors, thereby fueling the housing boom. Are house where we live did go
up in value and I noticed in 2005 there were a many different reality companies and mortgage brokers
making calls to asking about refinancing. We even after we did refinance our home we still got
calls from different companies saying you can still refinance and take money out for
improvements to your home or take a vacation. This was not the normal practice what all these
lenders and banks should be doing. We did not take the advice of any of those companies because it
just sounded too good of a deal and could turn it to a big disaster and to me this was just lots of
trouble and eventually home owners would be in trouble financially and run the risk of losing the
persons home, since they would not be able to afford the mortgage. But this was the risk these
banks and lenders did. Then in 2009 our home then drops back down in value to the original
value of the house when we bought it back in 1993. All the cheap credit and risky lending has
put San Diego home owners at risk of losing their homes. Do to fact that most refinanced their
homes