I
read the below article with total disbelief. The President has
proposed that we again pressure banks to give home loans to as many as
possible. He apparently believes that will jump start the economy.
Haven't we tried that before? Wasn't that a primary reason for the
Housing Collapse from which we haven't yet recovered? And, our
President wants to do it again? I am beginning to think the man has a
few loose screws.
Read this quote and tell me I misunderstand what the President and his key housing "experts" are planning to do. "The
FHA, in coordination with the White House, is working to develop new
policies to make clear to banks that they will not lose their guarantees
or face other legal action if loans that conform to the program’s
standards later default. Officials hope the FHA’s actions will then spur
Fannie and Freddie to do the same."
Digest that quote and then
consider this one. "And now, after whining for more bank regulations,
the White House wants even looser lending standards. Let's lower our
standards so everyone qualifies for a loan. Again! And while we're at
it, let's make the banks immune from prosecution! Then let's put
taxpayers at risk via 'taxpayer-backed programs' for the whole
boondoggle."
Remember that it was idiots
within government in both the Clinton and Bush administrations
who pushed for similar, if not the same, programs. And compliant
Congresses went along by writing the laws implementing a whole host
of "great" ideas (loose lending standards, no/low down payments, etc.).
Then government officials and Congress started pressuring relunctant
banks/lending institutions to go along. They needed to get with the
program. It was the right thing to do you know. Everybody regardless
of ability to pay deserves to own their own home and have a piece of the
American dream. And besides the government promised to protect the
interests of lenders should anything go wrong. They had the means to do
so. We will just raise taxes to bail out banks that get in trouble.
Well, banks got greedy and started creating new, more modern investment
vehicles that were risky but they didn't tell anybody, especially the
investors. What could go wrong? Besides the government's got our
backs. Then the bubble burst. Do you remember who paid the price and is
still paying the price? Hint. It was not the banks. It was average
American taxpayers.
As the author of the article says
"This is all so obviously stupid that only a fool could propose it.
And a fool in the highest spot did just that."
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