“F.H.A. and government-sponsored Fannie Mae and Freddie Mac have been demanding lower credit standards — just as the feds did starting under President Bill Clinton, in pursuit of the same “affordable housing” goal. The Office of the Comptroller of the Currency recently warned that mortgage underwriting standards have slipped and now reflect “broad trends similar to those experienced from 2005 through 2007, before the most recent financial crisis.”…

…When the economy and housing prices turn south again, a lot of these loans will go bad, just as they did last time. Some borrowers need only put 3 percent down to get a Fannie Mae loan — even if the down payment is a gift. Fannie also has started up a new subprime lending program. Good news: That probably won’t cause another global financial crisis, because the banks largely learned their lesson on that front back in 2008. Bad news: The taxpayers will likely wind up on the hook. Directly or indirectly, Uncle Sam has been responsible for insuring at least 80 percent of new mortgages since 2008. President Obama loves to cite “the definition of insanity” as “doing the same thing over and over again and expecting a different result.” Which prompts the question: Is he expecting these disastrous mortgage policies to bring a different result this time?”, Excerpt from the New York Post Editorial Board’s: “Team Obama is Setting Us Up for Another Housing Collapse”, April 9, 2016

Posted on April 12, 2016, in Postings. Bookmark the permalink. Leave a comment.

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