Comments on: Negative Feedback Loop – Mortgages vs Investments http://www.amybergquist.com/blog/2008/09/21/negative-feedback-loop-mortgages-vs-investments/ News and views about real estate in Greater Hartford Fri, 10 Feb 2012 18:22:11 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Jude http://www.amybergquist.com/blog/2008/09/21/negative-feedback-loop-mortgages-vs-investments/#comment-261 Jude Thu, 25 Sep 2008 10:08:04 +0000 http://www.amybergquist.com/blog/?p=801#comment-261 I wonder if there is a similar diagram that can be drawn illustrating the positive feedback loop that resulted in the housing bubble and skyrocketing real estate prices in the first place? I wonder if there is a similar diagram that can be drawn illustrating the positive feedback loop that resulted in the housing bubble and skyrocketing real estate prices in the first place?

]]> By: Rob http://www.amybergquist.com/blog/2008/09/21/negative-feedback-loop-mortgages-vs-investments/#comment-260 Rob Mon, 22 Sep 2008 22:15:52 +0000 http://www.amybergquist.com/blog/?p=801#comment-260 You forgot "home buyers lose down-payment savings when treasury dilutes the value of FRE/FNM common stock by 80%" It looks like the government is going to try to break the loop by buying up troubled mortgages on the cheap and then (with the help of new legislation) alter existing contracts to make them more affordable for the post-bankrupt homeowner and less risky for the lender. This should allow the treasury to eventually recoup its investment, and stabilize the mortgage industry... Finally, for the long-term increased regulatory oversight for the Mac's and financial institutions that buy their securities. Maybe FRE/FNM common will come back to the $5 - $10 range and I'll have an opportunity to buy one of your West Hartford listings. But, we can only hope. You forgot “home buyers lose down-payment savings when treasury dilutes the value of FRE/FNM common stock by 80%”

It looks like the government is going to try to break the loop by buying up troubled mortgages on the cheap and then (with the help of new legislation) alter existing contracts to make them more affordable for the post-bankrupt homeowner and less risky for the lender. This should allow the treasury to eventually recoup its investment, and stabilize the mortgage industry… Finally, for the long-term increased regulatory oversight for the Mac’s and financial institutions that buy their securities.

Maybe FRE/FNM common will come back to the $5 – $10 range and I’ll have an opportunity to buy one of your West Hartford listings. But, we can only hope.

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