Excellent post, comments and totally on topic to today's leading stories.  Not even sure where to jump in.  The aforementioned MyCommunity (Fannie Mae) and Affordable Gold -- now known as Home Possible (Freddie Mac) still seem to be going strong.  That being said the cracks in the surface of those loans began to show up earlier this year. 

These 100% programs sponsored by Freddie and Fannie are still out there and the guidelines are flexible.  But these were designed specifically for low to moderate income families with not much in the way of down payment.  Initially, one of the best features of this loan, was that the mortgage insurance was NOT tied to your credit score.  However, this changed earlier this year.  This meant that folks who didn't automatically get approved with Fannie Mae and folks who didn't have a 620 credit score or better were forced to pay more.  Sometimes significantly more (up to 2.2% in some rare instances).  In addition to that many of the lenders I work with have stopped approving loans based on their own guidelines.  Credit must be 580 in many cases, whereas before, it wasn't an issue -- or as much of an issue. 

OK, now my babbling can go one of two ways here:

1)  Geez, can't the government and banks step in and help out.  I mean housing is so critical to the overall economy.  People are losing their jobs, their homes and people who want and deserve homes are having trouble getting them.

2)  Geez, can't the government (Sure, let's just raise taxes on everyone who did things the right way, like their parents and grandparents did and give money to people who haven't earned it) and banks step in and help out (Keep making high risk loans).  I mean housing is so critical to the overall economy (I may not make as much money as I made last year).  People are losing their jobs (the real estate industry boomed and is now settling back toward earth), their homes (I bought ten investment properties in Florida with no money down and didn't INSTANTLY get rich and retire) and people who want (hey, everybody is doing it, why not me) and deserve(but I REALLY want a home -- I promise I'll repay the loan even though I'm 3 months late on my electric bill and my mortgage, taxes and insurance will cost me 2x what I currently pay in rent, buying a home will help me fix my credit) homes are having trouble getting them.

Not sure what the right answer is, probably somewhere in the middle.  The collapse of the entire banking and real estate industry IS a significant issue.  However, it reminds me of not too many moons ago.  For 10+ years I worked in the Internet industry.  Yes, before public access, all through 14.4k dial-ups to broadband in the home.  As the Internet industry exploded, I couldn't understand the businesses that were getting money - LOADS of money - while not making any money.  Well, needless to say, those companies are gone, but the Internet is still here (obviously) and becoming more integral to our way of life than ever.  So, my analogy is that the lending and real estate market needs some correcting as well, but it will not stop or go away, but come back stronger and leaner than ever.  Real estate is also much more market dependent.  The lending is less so, but many states are taking preemptive action to curtail risky and predatory lending.

I think I'm done.  Great pics as usual...

FYI - Countrywide News - not good news

More fun news provide by another AR member - I had just heard it as well:

Is First Magnus Done?

Thanks to Carey Goldberg for the in-site and info...