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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Think4Yourself who wrote (76312)	4/18/2007 11:17:16 PM
From: XoFruitCake	Read Replies (1) \| Respond to of 306849

"I was initially concerned about the FRE news. Buying 20B in subprime" heh heh, I wouldn't worry about the bailout. The devil is in the details. Freddie and FNM is only the middle man, the ultimate buyer is going to dictate the term and underwriting guideline of this new pool of mortgage. It is a catch 22 situation. If they relax the guideline to the subprime 560 fico, stated, 100% loan standard, Freddie and FNM will have to to keep the AA tranches and below (so figure may be 100-150M for each B of loan securitized that Freddie and FNM is ready to loss). And they may not be able to find a buyer for this kind of "AAA" tranch either. And if they raise the underwriting standard to your 660+, low doc, strict apprasial, 95-CLTV type of standard, none of the people in trouble can qualify. I think it is just one of those political move and by the time that they get this in motion, it will be pretty clear that no one can do anything because the problem is getting too big.