Unfortunately, even Congress — that bastion of liberalism and home of the bailout — is tiring of pouring good money after bad into the two mortgage giants that have been sucking up all the mortgages — good and bad — that private industry is willing to create. To paraphrase one-time third party Presidential candidate, Ross Perot: That giant sucking sound you hear is taxpayer money subsidizing home mortgages.
Now, the big questions remains: What will happen next? If there is no Fannie and Freddie to buy up all the mortgages, who will do it? Will the lenders who originate the mortgages be forced to keep them on their books and won’t this further inhibit an already tight credit market?
I’m not an economist and I’m not even a lowly retail mortgage originator. However, my intuition tells me that as soon as Congress dismantles Fannie and Freddie or morph them into something unrecognizable, the housing market is going to go through a major radical shift that will make the current recessionary pressures seem like the “good old days”.
If there is no money to go around will it matter that real estate is totally automated, complete with fancy graphical transaction progress bars, digital signatures, and “showing agents” who will simply open a lockbox for you, wait outside and text their friends while you look around the house (oh,wait. that’s now.)
Where will the money come from? Where will it go?
