via Housing Bubble Blog:
You have to stop this. Yes, you! Write your Representative and your Senators. As opposed to stealing money from home owners, investment banks are now seeking to steal money in a new way from taxpayers, one of whom it is harder to avoid being.
It's been highly touted as an economic stimulus bill that will help millions of Americans - and has the backing of both President Bush and House Speaker Nancy Pelosi.... As part of the bill, Congress is set to rush through an increase in the mortgage loan limits for Fannie Mae and Freddie Mac (and Federal Housing Administration insurance, too) - from $417,000 to $729,750 - the first step toward a massive financial disaster in which taxpayers will end up paying through the nose.
Here's how we got to this point. Domestic and international investors hold hundreds of billions of dollars in bad debt, because U.S. investment houses sold them junk securities based on often fraudulent mortgages. Many of these mortgages were sold to unqualified buyers under terms that made widespread foreclosures a certainty once the housing market began to fall.
Investment banks and bond rating agencies sat down and tried to figure out how to describe Americans with insufficient incomes and little for a down payment as great credit risks on loans too big for their incomes. The new rules focused on credit scores, because it was a good excuse to avoid looking at income and down payment, factors that would have restricted this moneymaking fiasco.
This is what I wrote:
Dear [Representative/Senator][name here],
I read a very alarming column in the San Francisco Chronicle today pointing out that part of the economic stimulus package was an expansion of the size of the loans Fannie Mae and Freddie Mac could buy by 75 %. Congress should be acting to make homes more affordable by limiting mortgage terms to 30 or fewer years, not attempting to prolong their anhistoric divergence from income distributions.
If this stimulus package can not be stopped, please support an amendment to remove this provision.
Thank you! I remain
Rionn Fears Malechem
Update: I mean 75%, of course. Never do math with calculators. The letters I actually sent said "17.5%."