Posted on 01/13/2016 12:39:53 PM PST by Whenifhow
President Barack Obama is bringing the subprime-mortgage crisis back, fueled by the progressives' political urge to treat borrowed money loans as a "right" that everyone is "entitled" to get, and by the willingness to dismiss mathematical probability as a racist conspiracy.
The last time liberals ran this mortgage ponzi-scheme, from 1995 to 2007, they almost crashed the financial system of the entire planet. They managed to largely evade responsibility by pinning the blame on their junior partners -- the banks, the stock-market and the GOP -- and even found political profit in the ensuing panic, so why shouldn't President Obama not try again?
From Investors Business Daily comes word of what the editors christen "Subprime 2.0":
The White House is rolling out a new low-income mortgage program that for the first time lets lenders qualify borrowers by counting income from nonborrowers living in the household. What could go wrong?
The HomeReady program is offered through Fannie Mae, which is now controlled by Obama's old Congressional Black Caucus pal Mel Watt. It replaces the bankrupted mortgage giant's notorious old subprime program, MyCommunityMortgage.
No worries, though, because Democrats realized the phrase "subprime loan" makes people nervous, so they worked a little Orwellian magic and renamed them "alternative loans." That'll fix everything!
As IBD explains, the new scheme might even be riskier than the financial H-bomb which Congress could not defuse once the countdown began in 1995, because applicants can use some remarkably fanciful accounting to tally up their "income":
At least before the crisis, your income had to be your own. But now, as a renter, you can get a conventional home loan backed by Fannie by claiming other people's income. That's right: You can use your apartment roommate's paycheck to augment your qualifying income.
(Excerpt) Read more at breitbart.com ...
Fannie Mae Rolls Out Easy Mortgage, Catering To High-Risk Immigrants
http://www.freerepublic.com/focus/f-news/3381566/posts
http://news.investors.com/ibd-editorials/010716-788747-government-wants-to-lend-more-to-high-risk-immigrants.htm?p=full
The Government Boldly Just Set Up Another Real Estate Meltdown
http://www.freerepublic.com/focus/f-news/3383172/posts
http://townhall.com/columnists/michaelhausam/2016/01/13/the-government-boldly-just-set-up-another-real-estate-meltdown-n2103915
What could go wrong?
From someone who taught RE LAW and ECON in college for 10 years -— THIS IS CRAZY. There is a reason the dictionary has the word tenant. Some people should be tenants. This will create another artificial spike in prices, massive defaults, and another crash.
Let me be the first....All Bushes fault.
Democrat fall back position...
Bush pushed for an inquiry of FNMA etc years before their collapse. But was ridiculed by the Media and stopped by the Democrats. Same thing with trying to save Social Security.
I think it was Carter that got the ball rolling on the Community Reinvestment Act, but it was Bubba Clinton that put it on steroids.
I hate too sound selfish, but I’m OK with another real estate bubble. A run up in home prices in the next couple of years would suit our retirement plans just fine. In fact, our home is our ONLY current investment that is not locked in safe and secure.
Actually it was the peanut farmer who came up with the Community Reinvestment Act which forced banks to lend to under qualified borrowers especially minorities. I may be wrong but don’t think so.
I think you’re right.
Or rent out rooms.
It is worse than that. The big banks that were forced to take bailouts and absorb the loser banks shot straight over to commodities for investment with the bailout money, investment that ha lost almost 50%. Couple that with housing bubble 2.0; forget it.
I saw an early release of the movie the long short. I thought I had an idea of what happened that led up to ‘08; I had no clue and now a days it is far, far worse than most people can comprehend.
I hate to say this, but watch this bubble as best you can and try to sell accordingly before the burst; keep yourself very liquid and pay off all the debt that you can with the proceeds of your home sale.
(note, not directing this post directly at you DFU)
Good analysis.
Thanks. I think that is the first time today. I was with my ex all day and she is very gifted at pointing out my flaws.
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