How far does he want the rates to drop? Remember, when the Fed Reserve dropped interest rates in the early 2000s, house prices skyrocketed, homeowners kept borrowing against their homes, and then everything crashed.
“How far does he want the rates to drop? Remember, when the Fed Reserve dropped interest rates in the early 2000s, house prices skyrocketed, homeowners kept borrowing against their homes, and then everything crashed.”
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The big driver of the 2008 crisis was all the lax requirements to get a mortgage, which was driven by the centrally planned economies of Clinton and Bush, in an effort to get more people into home ownership.
NINA loans (no income, no assets) and BS appraisals (overvaluing homes allowing for more and bigger equity loans) led to the crisis. Too many unqualified buyers got into a mortgage, then those mortgages were bundled and sold as “high-quality” mortgage-backed securities (MBS). Derivatives were created based on these MBS, and risk was leveraged out the wazoo.
When poorly qualified homeowners started to default on their mortgages in record numbers, the whole system collapsed.