Have We Learned Nothing?


Just got out of my car returning from the Post Office.  While driving I heard an advertisement that said that So-and-So Mortgage Company has money at the lowest rates since 1915 (or some such stupid claim).   The ad clearly said that Fannie Mae was now guaranteeing loans up to $700,000 and that they can finance up to 105% of the value of your property with the guarantee.

Isn’t this a big part of what got us into this mess?  I thought for sure I had heard Mr. Geithner say that the Bush Administration had caused our plight by not watching Fannie and Freddie and that he (Geithner) was going to fix Fannie Mae and Freddie Mac so this could never happen again.*

*note to Mr. Geithner – You can’t just blame others.  You actually have to do something to fix the problem.  Continuing to let Fannie Mae lend money with collateral less than the amount of the loan is not the way to fix a problem that was started by lending money with collateral less than the amount of the loan.