Housing Tax Credit Instead


	Housing Tax Credit Instead

Victoria Barret

7-22-2008 1:19 PM

496 views

tags:

housing, fanne mae, freddie mac

Victoria Barret says:

Fan & Fred pass some cheap money to home buyers, but the majority of it goes to banks. Why is the U.S. government subsidizing lenders? Instead, pass along the savings directly to homeowners.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://www.clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/ebd7f2e3-2b95-45fc-b5c6-424d8b49a57d/D718227B-0080-4DF2-A505-812E4E84F2BF/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://online.wsj.com/article/SB121668641781872139.html" href="http://online.wsj.com/article/SB121668641781872139.html" style="font-size: 11px;">online.wsj.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://online.wsj.com/article/SB121668641781872139.html"><P class="times">In addition, the assumption that U.S. taxpayers would stand behind Fannie and Freddie's bonds allowed them to get by with far less capital than their private market competitors (less than 1% capital to assets versus the market standard of 6% to 8%).</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://online.wsj.com/article/SB121668641781872139.html"><P class="times">Fannie and Freddie successfully fought back, arguing that they pass on to borrowers most of the savings from their below-market-rate prices for capital. But that is debatable. Most economists believe borrowers get at most 10 basis points of Fannie and Freddie's built-in market advantage of 25 to 40 basis points.</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://online.wsj.com/article/SB121668641781872139.html">That credit, if set to equal 10 basis points of the total mortgage rate, would be worth $400 a year on a $400,000 loan, about equal to what Fannie and Freddie provide indirectly to homeowners, and with considerably less noise and risk.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://online.wsj.com/article/SB121668641781872139.html">Don't hide a housing subsidy by outsourcing government policy to a semi-private, for-profit corporation that exposes the taxpayers to $5 trillion in potential liabilities.</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/D718227B-0080-4DF2-A505-812E4E84F2BF/blog/" title="blog or email this clip"><img src="http://content9.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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