Economic Focus

Whos At Fault, Really?

New York Mayer Michael Bloomberg has it right when he recently said, It was not the banks that caused the mortgage crisis. It was, plain and simple, Congress, who forced everybody to go and give mortgages to people who were on the cusp. They were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. By 1992 Fannie and Freddie, who have access to Washingtons deep pockets were funding over 70% of the mortgage securitizations. And no wonder, they were given a Congressional mandate through the Department of Housing and Urban Development began setting affordable mortgage goals for both agencies. That same year Countrywide stepped up their courtship with Fannie Mae and partner with the agency as the buying conduit to build revenues of $92 million in 1992, to $860 million in 1996, to $2 billion in 2000. This made Countrywide the nations largest mortgage lender. Not to go unnoticed that year, Fannie Mae Foundation honored Countrywide for Outstanding Achievement in the industry and their annual report noted: When necessary in cases where applicants have no established credit history, for example Countrywide uses nontraditional credit, a practice now accepted by [Fannie]. In 2004, at the height of the housing boom, Countrywide was Fannie Maes largest supplier and by 2006 accounted for 26% of their loans, rising to 28% in 2007. So up to the bust, Fannie Mae and Freddie Mac rewarded the likes of Countrywide for making bad loans to marginal borrowers. Then the housing market blew up, thanks to the Wall Street and the private sectorRight?
RELEASE DATE Tue 11/15 8:30 am et Tue 11/15 8:30 am et Tue 11/15 10:00 am et Wed 11/16 7:00 am et Wed 11/16 8:30 am et Wed 11/16 9:15 am et Wed 11/16 10:00 am et Thu 11/17 8:30 am et Thu 11/17 8:30 am et Thu 11/17 10:00 am et Fri 11/18 10:00 am et
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for the week of November 14, 2011 Volume 15, Issue 44

Key Economic Reports Released This Week
ECONOMIC INDICATORS RELEASED BY Bur. of Labor Statistics Department of Labor Bureau of the Census Dept. of Commerce Bureau of the Census Dept. of Commerce Mortgage Bankers Association of America Bur. of Labor Statistics Department of Labor Federal Reserve Board National Association of Home Builders Bur. of Labor Statistics Department of Labor Bureau of the Census Dept. of Commerce Federal Reserve Bank of Philadelphia Bur. of Econ. Analysis Dept. of Commerce CONSENSUS 1 SURVEY -02% core 0.2% 0.3% x-autos 0.2% 0.3% N/A 0.0% core 0.2% IP 0.5% CU 77.7% 17 395k 605k 8.0% 0.4% Wt. *** **** * * *** *** * * *** ** ** INFLUENCE ON INTEREST RATES

Producer Price Index for October 11 Retail Sales for October 11 Business Inventories for September 11 MBA Mtg Apps Survey for week ending 11/11 Consumer Price Index for October 11 Ind Production / Cap Utilization for October 11 NAHB Housing Index for November 11 Jobless Claims for week ending 11/12 Housing Starts / Bldg Permits for October 11 Philadelphia Fed Survey for November 11 Leading Economic Indicators for October 11

If above consensus If below consensus If above consensus If below consensus If above consensus If below consensus
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If above consensus If below consensus If above consensus If below consensus

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If above consensus If below consensus If above consensus If below consensus

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If above consensus If below consensus

Survey courtesy of Insight Economics, LLC

* Low Importance ** Moderate Importance *** Important **** Ver y Important

Sorry, the mortgage lenders and Wall Street are not innocent in this debacle. But they were responding to the urging of the federal government. Now, that the Genie is out of the bottle Washington is trying to cram it back in with more regulations and spending programs throwing good after bad? It is time for Washington to get out of the way and let the private sector sort out this mess. What do you think that will happen? Lawmakers are genetically engineered to pass more laws and regulations and the bureaucrats are just waiting there to enforce them. What are the markets and potential homeowners to do?
Jessica Lombardo Loan Officer Hi-Tech Mortgage 2184 McCulloch Boulevard, # A Lake Havasu City, AZ 86403 jessica@hi-techmortgage.com Office: 866.768.5626 Cell: 916.548.8533 Fax: 916.372.2518