“And that housing debacle almost cost the US a complete depression.”
If I remember, I may be wrong, it was when you had to put no money down to purchase a home, many defaults arose. I believe at one time you needed 20% 0f the borrowing price.
“I believe at one time you needed 20% 0f the borrowing price.”
According to the National Association of Realtors the average down was 25 percent and the same in 2005 and 2009.
Homeownership jumped in 1989 from 64% to 69% in 2005 and 2006 but started down steadily after. It was listed at 67% in 2011.
The U.S. economy was still struggling with the effects of its longest recession since the 1930s, which was triggered in large part by the housing crisis, which was in part triggered by the crash of the subprime loan market. African-Americans with similar credit profiles and down-payment ratios to white borrowers were more likely to receive subprime loans. (Congress forced them) And as a result, from 1993 to 2000, the share of subprime mortgages going to households in minority neighborhoods rose from 2 to 18 percent. So like I said, this is not new, it’s repeated and made to look like a silk purse.
Conservatives have claimed that the financial crisis was caused by too much regulation aimed at increasing home ownership rates for lower income people. They have pointed to two policies in particular: the Community Reinvestment Act (CRA) of 1977 (particularly as modified in the 1990s), which they claim pressured private banks to make risky loans, and HUD affordable housing goals for the government-sponsored enterprises (”GSEs”) — Fannie Mae and Freddie Mac — which they claim caused the GSEs to purchase risky loans, and led to a general breakdown in underwriting standards for all lending.
And by the time the feds accomplished a reverse anal/cranial insertion, the worth of the homes in question were devalued below the price of the product so they couldn’t resell to get out of the loss anywhere near the on paper value of the loan. So, all they could do was walk away with a foreclosure.
wy69