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This is the opposite of surprising and writing scare headlines betrays an extremely shallow understanding of the mortgage market. Simply put, the GSEs were crea
by revel 8y ago
This is the opposite of surprising and writing scare headlines betrays an extremely shallow understanding of the mortgage market. Simply put, the GSEs were created to underwrite high quality mortgages, in fact they are legally compelled to do so. That's why they exist.
There are more conforming, high quality mortgages than there were in the run up to the financial crisis. You don't hear about zero interest or liar loans any more because they're mostly not available any more. It's a good thing that those products aren't available any more. The average quality of mortgages is much, much higher. The flip side of that is that of course the GSEs have increased the size of their balance sheets: that's exactly what they were designed to do! This is like getting mad at a tree you planted for growing leaves.
- AdamM12 8y agoI'll have to do a deep dive for this article I read out of the WSJ about how the average credit score for GSE loans is significantly higher than before. I think a lot of people are more educated and better managing their credit score than before as well as tightening of standards. I've always found it annoying how demonized MBS are because they serve a very useful purpose. When it gets into shit like synthetic CDO's and stuff that is kinda wack but whatever who am I to tell people how to use their money. MSBs only suck when the underwriting is bad or fraudulent which it was.
- kaycebasques 8y agoYou’re bringing your own interpretation to the headline. I intentionally used impartial words when writing it. I just think it’s a noteworthy fact and wanted to see what HN thought about it. Noland (the author of the article) sees it as a bad thing, but that’s a different story.