Sunday, April 10, 2016

Obama pushing mortgage lenders into another meltdown. What Einstein said about madness is operative here. Get a loan with bad credit and a 3% downpayment?

Team Obama is setting us up for another housing-market collapse

The Obama administration is doing its best to give the nation another mortgage meltdown.
As Paul Sperry recently noted in The Post, Team Obama has pushed mortgage lenders to offer home loans to folks with shaky credit, setting up conditions for another housing-market collapse.
Wasn’t the last one bad enough?
Credit scores of approved borrowers, for example, have been trending down, even as their debt levels have grown.
The Federal Housing Administration and government-sponsored “independent” lenders 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.
Some borrowers need only put 3 percent down to get a Fannie Mae loan — even if the downpayment is a gift. Fannie also has started up a new subprime-lending program.
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.
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?

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