The seeds of another collapse are being sewn even as you read this
This is a story Ed Morrissey caught at Hot Air and he is right, ABC News buried the lead but then again, that does not surprise me. The story concerns those no-doc loans that got the economy in trouble in the first place. You know, the loans that the government insisted bankers make, and gleefully backed then with the assurance of Fannie Mae and Freddie Mac. Well they are back.
It’s not Fannie Mae on the hook … but FHA … here’s the gist of the story. ABC reports that the no-doc “liar” loans are being made only to high net worth clients who can easily afford them. And besides, as the article points out, there’s plenty of equity for the banks to fall back on should things sour.
But then Ed catches this. No-doc “liar loans” are also being made to low income high risk borrowers as well, only this time its not Fannie Mae on the hook … it the FHA.
“This guy made $5 million in 2007 and 2008. He’s liquid for $10 million, and he’s borrowing 20% LTV (loan-to-value),” says Dessner. A no-doc loan to that kind of borrower shouldn’t be political dynamite, especially at a time when the Federal Housing Administration is making 95% LTV loans to low-income borrowers with poor credit and little savings, he argues.
Hard to believe? Not for me. This crowd has an agenda. It feels certain people have been denied a piece of the pie like housing or medical care and the Democrats continue to offer plenty of pie. But the bottom line here is the risk … short memories.
Say what? Well, the fact that the federal government has shifted its social engineering to FHA after all but destroying Freddie and Fannie should come as no surprise. Nor should it come as a surprise that they’re using the same mortgage-backed securities mechanism that created the global financial collapse to shed the cost of guaranteeing those loans. But one might have thought that the collapse of the housing bubble from overspeculation and irrational supply of credit would have taught Washington a lesson about interfering with the lending markets.
Go to Hot Air and read the whole thing.
But
9 Comments
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Sounds like theft by proxy. Yet again separating tax payers from their money and blaming on the borrower or the institution but not where the blame truely belongs.
Why is it that every day, I feel more and more like these numbskulls in Washington should not have a job that has any more responsibility than that conferred by a toilet brush?
Once again, if the media were objective, and doing its job, they would not be getting away with this crap.
I would like to hear the Republicans attack this. The voices on this blog don't even reach the ears of the CT delegations.
They ignore the voices anyway. Here in MA, they ignore referendum votes too.
Why would anyone be surprised at this? The finical crisis they arraigned the first time worked great for dem and now they need another one. Perhaps they can use these loans to buy some nice new addresses for their dead and/or illegal immigrant voting blocks.
The Republicans were in power eight years before the financial crisis hit ……..they are just as much to blame as Bill Clinton's easing of credit requirements ..Why don't you guys do some research and then you can be taken seriously.Yeah I know it's Obama's border fiasco and it's Obama's BP oil leak…Sure.. some idiots even say we should blow the well up even though there is a large amount of methane gas that could cause a calamity like no other we have seen….we could lose a part of the ocean floor and create a tsunami of epic proportions ………………idiots…………..
Mr. I'm-The-President Obama is in power NOW, along with the democrats in the house & senate. Why do you have to blame republicans for what obama is doing NOW? Perhaps because you cannot wrap your mind around obama's inability to learn from the past mistakes of previous administrations? Social engineering is an obama/democrat thing.
Blame, blame, blame, blame, blame Bush/Republicans…I don't see how outrageously liberal democrats will ever be taken seriously unless and until they come up with valid arguments that are relevant to TODAY. You can blame Bush and the Republicans all you want, it doesn't change the fact that Obama is a sucky president and people like Pelosi are de and lusional.
I think this will answer all your questions:
http://www.agoyandhisblog.com/2010/03/26/every-pi…
I am sure you won't like the answers though.
Same old, same old; new day, same shit!