In my country there is no real equivalent of Fanie Mae/Fredie Mac, so in order to get a mortgage you must have proven income, stable job, and at least %30 down payment.
It makes it harder to buy a house, but deliquinces are low, and prices are not heated up.
If banks had to bear the risk of issuing the mortgages, you would see lending standards tightenning up overnight, and most of the risky borrowrers wont be able to get any mortgages, which actually is a good thing.
In the article it says how Fanie Mae started this huge campain so the congress would loosen up the credit requirement in the name of "house affordability" for the poor etc... when it was actually self-centered policy, by the top executives so Fanie Mae could keep its profits rising, and their bonuses flowing. Of course, this would backfire at some point, but who cares, they made their money in the bank, who cares on what happens 10 years down the road, the goverment will bail them out, right...?
I really hope the goverment doesn't, and just let them go down. It would be fun. Actually houses will end up being affordable for those people that live honestly within their means, have good credit, stable jobs, and a good amount of savings, while the irresponsible wont be able to even get a mortagage anymore, (or one with reasonable rates).
The price boom in Spain was mostly due to British and German expats buying up coastal condos and villas. Many of the Spaniards I know in Andalucia (a southern coastal province) complain that housing prices are outlandishly high, to the point of unaffordability. Because of this (and the traditionally higher unemployment rate in the south), it's often customary for kids to live with their parents into their 30s before they can afford a house (and a family) of their own.
A comparable house in Ronda, Spain to those in my native Kansas is roughly twice as expensive, but to a Londoner accustomed to things costing four times that (eight times Kansas prices), Spanish houses look like a great deal.
In my country there is no real equivalent of Fanie Mae/Fredie Mac, so in order to get a mortgage you must have proven income, stable job, and at least %30 down payment.
It makes it harder to buy a house, but deliquinces are low, and prices are not heated up.
If banks had to bear the risk of issuing the mortgages, you would see lending standards tightenning up overnight, and most of the risky borrowrers wont be able to get any mortgages, which actually is a good thing.
In the article it says how Fanie Mae started this huge campain so the congress would loosen up the credit requirement in the name of "house affordability" for the poor etc... when it was actually self-centered policy, by the top executives so Fanie Mae could keep its profits rising, and their bonuses flowing. Of course, this would backfire at some point, but who cares, they made their money in the bank, who cares on what happens 10 years down the road, the goverment will bail them out, right...?
I really hope the goverment doesn't, and just let them go down. It would be fun. Actually houses will end up being affordable for those people that live honestly within their means, have good credit, stable jobs, and a good amount of savings, while the irresponsible wont be able to even get a mortagage anymore, (or one with reasonable rates).