So, what's the difference between Wall Street, Fannie & Freddie?

[CrusaderFrank]

In my continuing quest to roll back the ignorance that Progressive LMSM and educational system has inflicted on this once great nation I ask, "So, what's the difference between Wall Street, Fannie & Freddie?"

And in "Wall Street" I mean with respect to the housing market.

Take all the time you need to give me your government approved wrong answers, I'll be here waiting.

 

[uscitizen]

Fannie and freddie were set up to help the average working class americans obtain homes and thereby also help the construction and mortgage industry.

Wall Street was set up for the more wealthy to obtain money without actually doing any work.

 

[initforme]

US pretty much summed it up. Those who work on wall st are not my fellow americans.

 

[CrusaderFrank]

The Similarities:

1. They all buy mortgages from banks

2. They then repackage the mortgages and sell them

The Differences

1. F/F had de facto guarantees from the US Gubbamint

 

[The T]

The Similarities:

1. They all buy mortgages from banks

2. They then repackage the mortgages and sell them

The Differences

1. F/F had de facto guarantees from the US Gubbamint

Indeed. Whether we like it or not. Paying for deadbeats. Moochers.

 

[Too Tall]

Fannie and freddie were set up to help the average working class americans obtain homes and thereby also help the construction and mortgage industry.

Wall Street was set up for the more wealthy to obtain money without actually doing any work.

Fannie Mae and Freddie Mac were put under government control when failing subprime loans took them to the brink of insolvency. F & F rely on taxpayers for survival. The two have cost the Treasury Department about $130 billion since they were seized by regulators in September 2008.

Wall Street provides capital to hundreds of corporations that employ millions of people. Millions of the investors in Wall Street are Americans workers that invest in stocks and bonds in their 401K plans for their retirement.

 

[Toro]

In my continuing quest to roll back the ignorance that Progressive LMSM and educational system has inflicted on this once great nation I ask, "So, what's the difference between Wall Street, Fannie & Freddie?"

And in "Wall Street" I mean with respect to the housing market.

Take all the time you need to give me your government approved wrong answers, I'll be here waiting.

Not much, actually.

I think that is a very fair criticism of Fannie and Freddie. Like Wall Street, they became highly leveraged entities, even more leveraged than Wall Street.

One difference is that Wall Street churned out shit mortgage structured products. The GSEs just bought them.

 

[CrusaderFrank]

Q. Who set the standards of the percent of CRA loan a bank had to make, Wall Street or F/F?

 

[rdean]

The Similarities:

1. They all buy mortgages from banks

2. They then repackage the mortgages and sell them

The Differences

1. F/F had de facto guarantees from the US Gubbamint

Plus, FF made sure you had a job and could pay back the mortgage.

Wall Street gave mortgages to anyone who wanted one and then sold those mortgages overseas as securities so they could collect the insurance.

Fucker, how could you leave out the important stuff? You have to be a Republican. Your dishonesty exposes you.

 

[CrusaderFrank]

The Similarities:

1. They all buy mortgages from banks

2. They then repackage the mortgages and sell them

The Differences

1. F/F had de facto guarantees from the US Gubbamint

Plus, FF made sure you had a job and could pay back the mortgage.

Wall Street gave mortgages to anyone who wanted one and then sold those mortgages overseas as securities so they could collect the insurance.

Fucker, how could you leave out the important stuff? You have to be a Republican. Your dishonesty exposes you.

That's an incorrect answer!

F/F was the first to say they would accept No Income No Assets Loans.

 

[dilloduck]

Fannie and freddie were set up to help the average working class americans obtain homes and thereby also help the construction and mortgage industry.

Wall Street was set up for the more wealthy to obtain money without actually doing any work.

Fannie Mae and Freddie Mac were put under government control when failing subprime loans took them to the brink of insolvency. F & F rely on taxpayers for survival. The two have cost the Treasury Department about $130 billion since they were seized by regulators in September 2008.

Wall Street provides capital to hundreds of corporations that employ millions of people. Millions of the investors in Wall Street are Americans workers that invest in stocks and bonds in their 401K plans for their retirement.

So American provide capital to corporations. Wall Street merely takes a percentage for "helping"

 

[CrusaderFrank]

No, my friends that was not the end of the story. Let's continue.

F/F put a quasi government guarantee on the loans they bought from institutions (banks) then resold. For example, say they sold a package of $1B in various mortgages secured by single family homes (SFH) in the USA and the rate on that investment was 8%.

What Wall Street did was to notice that the market for securitized SHF mortgages was 8% with an assumed AAA credit enhancement from the US Government.

So they went out and bought $1B worth of mortgages, got an insurance company to provide their credit as a guarantee and then sell the $1B of say AA rated paper at 8.5%. The .5% is the increased reward for the risk spread between the AA and AAA rating. Wall Street made say .25% on the $1B and everyone was happy.

It's a wonderful system and as you can see, there is really no reason for the government to get involved at all. But, F/F started to greatly reduce the quality of the paper they were underwriting until they go to "No Income No Asset" Loans. The US government was putting its AAA rating on No Income No Asset Loans.

So then Wall Street started buying the same crappy paper and AIG and Prudential continued to enhance it until the whole system blew apart.

Then the real difference between F/F and Wall Street became apparent.

Lehmann went broke, Bear Stearns went broke, people who spent their entire careers there saw their stock go to worthless. Meanhwhile F/F got taken over by the government, nobody got fired, nobody there lost a nickel.

Wall Street falls under the jackboot of Obama FinReg from which F/F is totally exempt.

 

[iamwhatiseem]

Fannie and freddie were set up to help the average working class americans obtain homes and thereby also help the construction and mortgage industry.
.

And how did that work out?