100 mortgage 5

100 mortgage 5
After the stock market crash of 1929, thousands of banks failed. In 1933, Congress and then President Roosevelt, the Federal Deposit Insurance Corporation, better known to us all as the FDIC. A Federal Government guarantee of deposits. The effect was to maintaining stability and public confidence in the nations banking system.

The failure of Indy Mac Bank, the FDIC in strengthening their commitments to the account holder PAYBACK the value of insured assets. It is not beautiful, and as the biggest bank is not the date, it is the examination of a trial by fire way.

But if you believe that Senator Barack Obama, that there is "little doubt that the U.S. probably in recession," and that rapid measures to curb the housing market are a big part of the rebuilding plan, then the FMIC is the obvious answer.

Another stimulus packages and pumping money into Fannie Mae and Freddie Mac are not the answer. The government keeps treating the symptoms and not the disease.

The majority of analysts and economists, dealing with the problem concluded that the continuation of declining home prices is the first step in a recovery. But how are the prices to stabilize, if banks pull their loans?

As the desire to lend declined, coupled with increased lending and higher housing, by a bad economy and Foreclosure in some markets, prices can only continue to decline. Key credit risks, and Fannie and Freddie are small in comparison with their overall portfolio. What she is suffering a crisis of confidence.

According to mortgage industry veteran Robert Kofsky, the creation of FMIC CO Insurance FNMA, and FHLMC Mortgage Insurance Companies against further losses would create a new confidence in the mortgage markets, causing higher values for bonds, additional liquidity for the banks and to raise additional capital for lending because the risk be reduced by the support of the FMIC. With the minimum qualifying standard lending requirements, losses would be limited to a certain amount of U.S. dollars per object similar to FDIC insurance works now.

This would facilitate the financing of the buyer in the market with confidence at home prices to stabilize. Create a setting or at least reduction of the amortization of mortgage quality, better balance sheets and in some cases, allow financial institutions to write-some exciting investment.

This would further reduce the Foreclosure and the cost to the federal government would remain low taxpayer money. As it stands now, we are the costs for all of it. Rather than pump money into the system to treat the symptoms, let's cure the disease, is a crisis of confidence. Our history teaches us that the creation of the FMIC would have the same effect.

With U.S. dollars taxpayers bail out financial institutions or money on the problem, as the Finance Ministry and the Federal Reserve seems to be done to Keystone Cop in their response to this situation, the search for a viable long-term solution is the only way to cure what ails Financial markets and the economy.

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