Here We Go Again!
A sub-prime mortgage? Â Â Â Â Â Photo Credit:Â FreeImages.com/Roland Maier
Last July 20 I warned the federal government was beginning to practice the same irresponsible behavior that resulted in the financial crisis of 2007-2008 and the Great Recession that followed. Increasingly, I am seeing more warnings about this on the internet, as you can see here and here and here and here, and the practice appears to be increasing in volume. Republicans might be trying to alert the nation about this through Congressional oversight, but I suspect they will inspire very little interest with most of the news media.
This time around the lead agencies for the Obama administration are not HUD, Fannie Mae, and Freddie Mac, the way it was the last time. Instead, they are the Federal Housing Administration and the Federal Housing Finance Agency, through whom you can get a subprime mortgage for 3% down.You may have thought the Dodd-Frank Act creation of the Consumer Financial Protection Bureau was supposed to stop this kind of nonsense, but you would be very wrong. There are no rules set for minimum requirements for things like credit scores and down payments.
After all the pain and anguish unleashed by the Great Recession, why would President Obama want to set the stage for a repeat? I am almost ungenerous enough to think Obama is simply practicing what he once helped teach as a community organizer: Saul Alinsky’s Rules for Radicals. Going through a repeat of the Great Recession would almost guarantee another round of condemnations of capitalism and demands for total government control of businesses that help finance the economy. Naturally, blame would be pointed away from the FHA and the FHFA, just as it was pointed away from government during the Great Recession. Could this be what he is aiming to set up?
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