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Updated almost 13 years ago, 01/30/2012
Gotta Love Freddie!
Check out this 5 minute video on Freddie Mac, and how they operate.
Thoughts?
#4 Off Topic Contributor
- Investor
- Round Rock, TX
But Keith...we need the gov-mint to back "companies" like this so dat folks can get em a mortgage. Don't ya see?
I have absolutely no idea why these companies weren't dissolved RIGHT after the crisis. Baffles me to this day.
I heard this on NPR this morning. The investigation was by NPR and ProPublica and they had a pretty lengthy piece on it. Truly unreal. They certainly should be dissolved and their top execs put in jail.
In all that CDO slicing and dicing, they sliced off a piece that was interest only. Called an "inverse floater". Same idea as splitting a bond into a zero coupon bond (principle only) and coupons (interest only). But with this inverse floater, if people refi their loans and pay of the old loan, the interest payments disappear. If enough people refi out of the group of loans that went to be sliced and diced, the inverse floater is worth nothing.
I'm sure we will hear in coming days some explanation of how this is actually good for borrowers.
