Obama restarted subprime lending.
http://www.reuters.com/article/us-usa-housing-watchdog-idUSTRE63J0FO20100420
http://nypost.com/2016/04/09/team-obama-is-setting-us-up-for-another-housing-market-collapse/
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.”
http://www.wnd.com/2013/04/obama-orders-same-policy-that-sparked-mortgage-meltdown/#!
A lot of dubious information in the WND article.
Fannie and Freddie continued to deal in conforming paper during the bubble even when making loans to subprime borrowers. Conforming paper had the lowest default rate, that’s the reason for requiring conforming standards.
The loans that created the bubble and ultimately blew it up were made by F&F’s private sector competitors. The vast majority of these lenders were not covered by the CRA, they weren’t deposit-takers, and they made these loans without any gov’t pressure at all. These were Alt-A loans, NINJA loans, Option ARMS, the exact opposite of conforming paper. None of this will be coming back.
On its face I don’t like the idea of 3% downs and lowering standards, but if F&F are dealing only in conforming paper this is not remotely what we saw in bubble.