Fannie Mae, born of Democratic Party origins in 1938, is also known as FNMA or Federal National Mortgage Association. Freddie Mac, born in the 1970s as FNMC, Federal National Mortgage Corporation is of Republican parentage. Immediately you can recognize that the difference between these essentially useless quasi government agencies is their party politics. One was sired by Republicans the other by Democrats. It is unkind and not politically correct to declare that their sole purpose is to skim your mortgage payment of cash to the pleasure of their founding party elites. But, that's the truth.
The skim profits come from these special government agencies in stages. First, the of finance must be invoked to make people believe the nonsense that combining their local mortgage with a mortgage from some other area is important. Better yet, don't tell them anything. Just do it. Step 2, form a corporation to administer this packaging nonsense. Step3, issue shares for public sale that can pay an underwriting fee to cash starved Wall Street of 1938 and again in recesion harried 1970. Step 4, issue bonds that Wall Street can sell for more underwriting fees and can be sold to foreign investors for more fees and exchange rate scams. The implication on sale of these stocks and bonds, although not true, is that these are part of the credit history of the US Government. Step 5, concoct artificial combinations of maturity dates, interest rates and types of loans to sell as artifical "asset backed" securities to get even more fees and commissions from investors foreign and domestic.
Often your pension or mutual fund will own some of these artificial concoctions. You will no doubt realize that you are paying a fee for someone to manage these sophisticated and complex inventions at Freddie or Fannie as well as Wall Street. Yikes! How much lower would your mortgage interest be if this layer of costs did not exist in the mortgage market? A gentle estimate is that this financial razzle dazzle accounts for about 30% of your mortgage interest costs. Or, in dollar terms about 30% of the interest money paid by you will go Feddie and Fannie and Wall Street. This could amount to about 20% of the total purchase cost of your house. Double Yikes!! Don't even think about the percentage if the mortgage is now higher than the house market value.
It is probably unkind to point out that our populist stance has been warning about the economic cohort called Wall Street and its tendrils that slither in government under the guise of quasi federal agencies. According to the book; MONEY: The 12th & FINAL RELIGION, this cohort has a God called Molock that allows itself to be called market forces. Ultimately,the purpose is to use government affiliation to create interest and dividend incomes for the ruling party elites and their foreign controllers without market risk. The packaging of home mortgages was the power coup of the ages, a sort of financial "blizkreig". never before has a people been so completely financially enslaved to foreign interests so quietly, and completely and so quickly.
Obviously. the solution is an immediate and complete repudiation of the entire Freddie and Fannie structure and an immediate dismantling of all their affiliated offices and connections. Since representation of the public intention is the basis of elected government, and it is clear that there never was any local intent to "farm out" the local mortgage in order to increase home ownership costs, obviously there is no obligation to guarantee capital or pay profits to financial lobbyist manipulators and thsir "on the take" Congress Person or Senator.
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