The pressure to loosen lending repeats

[Tawfik Ahdab]

“The report argues that the federal entities, including Fannie Mae and Freddie Mac, whose backing influences nearly 9 in 10 mortgages in the U.S. should loosen their requirements.

Some experts objected that the Pew report is pointing in the wrong direction, back toward the 2008 crash.”

Did we make it too hard to get a mortgage after 2008? A new report says yes.

A report from the Pew Charitable Trusts argues that it's too hard to get a mortgage in the United States - and that lenders should be offering loans to people with weaker credit scores, despite the specter of the 2008 housing crash that was caused by extensive lending to people who couldn't...

finance.yahoo.com

 

[TerryRohrer]

Amazing how well stupid people get paid to pontificate. We are where we are due to government intervention. When lending standards become political (arguably with the creation of FNMA), the forces were set in motion to remove market signals from the market (like every form of government intervention). There are proponents of every form of government intervention imaginable. Lower interest rates, easier credit standards, building programs and grants, tax credits, free government land, etc, etc, etc. And every on is inflationary and will increase home prices. What should be done it to break the GSEs into 10 entities, split their existing portfolio however, give them enough capital/investors to have a chance, and kick them to the curb. With an explicit guarantee that there will be no intervention from the government ever again. Then, five years later, end FHA and USDA and VA involvement in financing. But, I expect it is more likely that every political demand will be granted before a single step is taken toward a sound system.