We are getting so screwed by the politicians and you want to know something most people are completely unaware of it.
Politicians created this housing depression through regulations which pushed a Utopian (i.e. communist) policy that all Americans should be homeowners. I'm sorry but if you make $25K you shouldn't be buying a $500k house. Now rather than fixing the problem we are going to bail out the problem.
In case you missed it, which would not be surprising because they intentional announced it while the whole country was distracted by Santa, on Christmas Eve the Treasury agreed to remove caps on spending for both Fannie and Freddie. Taxpayers already have provided $110.6 billion of direct support to Fannie and Freddie, while the Treasury and Federal Reserve have provided an additional $1.2 trillion of assistance through purchases of the mortgage giant's debt and mortgage-backed securities in the last year. Now thanks to the Treasury they have an unlimited line of credit.
So how is the US is ever going to pay off our $12 Trillion debt which will soon become $14 Trillion http://voices.washingtonpost.com/44/2010/01/senate-discussing-a-raise-in-n.html?wprss=44 and is mere pennies compared to the $107 Trillion in unfunded liabilities we owe for Medicare and Social Security http://www.ncpa.org/pub/ba662 ? The answer is rather simple real estate. I truly believe that if we ever default on our debt to the Chinese and Saudis that the US will simply begin securing the debt with our homes. Land has value just like gold and silver and the US has alot of land. Plus now that Fannie and Freddie hold over 50% of the mortgages in this country and as of December 2009 they are financing 75% of all mortgages through loans by the Federal Reserve which pass through the US Treasury it is possible. You see just like a bank the government can now sell off your loan to a foreign nation and if you default well they own your land. Welcome to the new securitized mortgage derivative market owned and controlled by Goldman Sachs. Don't think it can happen. If I had told you 18 months ago that the government would be the owner of two car companies, two mortgage companies and an insurance company I would have been crazy right.
Hearing urged on bailout for Fannie, Freddie
In other news, banks are now openly violating the law and no one is doing a damn thing about it:
Finally, in case you don't think the housing market could get any worst, well check out the latest predictions from RealtyTrac: