The headline, Team Obama is setting us up for another housing-market collapse, comes from an April 9th, 2016 opinion piece in the New York Post.
Given the historically slow recovery the past seven years, it doesn’t feel as though there could be a bubble anywhere. But there is.
The foundations of the attempted social engineering which contributed to the housing crash of 2008, unbelievably seem to be back in place. While it is nice to think everyone should have their own home, not every person is in a position to afford a home, or at least some of the homes they can buy on easy credit. What’s happening?
- Credit scores of approved borrowers are trending down
- Debt levels have grown
- Some borrowers only need a down payment of 3%
- The United States Government has been insuring Over 80% of the loans given since 2008
- The Federal Housing Administration and government-sponsored “independent” lenders Fannie Mae and Freddie Mac have been demanding lower credit standards just as in the affordable housing days of the Clinton administration
- The Administration is promoting ‘Fairness’ in lending – but is it fair to those footing the bill when mortgages fail?
When our economy goes into recession, expect mortgage failures. And now, the taxpayers will are on the hook for the failed mortgages. Larger down payments coupled with requiring higher credit scores would help solidify the housing market. A little common sense can go a long way.
It’s time for the Pollyanna lawmakers to understand there is a difference between willful discrimination and a business equation lenders have been using and refining for decades. Forcing lenders to lower standards so shaky mortgages can allow people to get into homes temporarily, until the next economic downswing, is foolish.