AMERICAS TRULY WONDERFUL MORTGAGE MARKET
In the USA of A Uncle Sam dresses up as Santa Claus every day of the week for the American Home Buyer
He takes away all the risk, hurt and pain with wonderful 30 Year fixed rate mortgages
and no need for a deposit....97% financing!!!!!!! .
However the risk is not destroyed.....no no no.... it is merely transferred to a BAG HOLDER
Who it this BAG HOLDER you might ask????
Well through the magic of Freddie and Fannie its the US Taxpayer
(Well really right now the holder of US treasuries given the Governments taste for deficit financing).
What could go possibly Wrong?????
Subprime 2.0 perhaps????
Its gets even better
Because the banks got so burned in subprime 1.0 they are letting the non bank lenders with no capital take on the task of originating and servicing the loans
Isn't that nice of them
No more nasty fines from the government or write downs if all the loans go suddenly south.
Well except for the NBL's that is,
But by then the Government will just be an unsecured creditor in the Bankruptcy courts.