Sound familiar?

[KenHorse]

Because it worked out so well the last time.....


https://www.wnd.com/2024/06/bidens-r...ert-6-9-2024-2

Biden's radical housing policies might crash whole system
'High-risk borrowers are encouraged to take on debt they can't repay'

The Biden administration has pushed for easier home financing for higher-risk borrowers amid surging housing costs, increasing the risk of a wave of defaults, experts told the Daily Caller News Foundation.

The government-sponsored corporations Freddie Mac and Fannie Mae, regulated by the Federal Home Financing Administration (FHFA), have taken a number of steps to increase financing opportunities for higher-risk borrowers under the Biden administration, including subsidizing higher-risk borrowing by hiking rates on lower-risk borrowers. Many of these actions have led to Americans taking on an increasingly large amount of debt while lending facilitated by government entities has grown in size, creating a growing possibility that a wave of foreclosures and defaults could create a shock in the housing system, according to experts who spoke to the DCNF.

“The new Fannie and Freddie mortgage pricing directive raised rates on low-risk borrowers and reduced them on high-risk borrowers,” Jason Sorens, senior research fellow at the American Institute of Economic Research, told the DCNF. “This is not really a free market to begin with, but the risk here is creating something like the subprime crisis, where high-risk borrowers are encouraged to take on debt they can’t repay. Again, this has the potential to hit the bottom line for Fannie and Freddie.”

The guidance from the FHFA to Freddie Mac and Fannie Mae to essentially subsidize higher-risk borrowers took effect in May 2023, according to the Congressional Research Service. For example, under the new guidance, those with credit scores between 640 and 659 who put down a down payment between 15% and 20% would have a fee rate charged of 2.250% instead of 2.750%, while borrowers with a credit score between 760 and 779 with the same down payment would have their added rate hiked to 0.625% instead of 0.250%.

Rising housing costs have also led the entities to raise how much housing debt Americans can take on through the government entities, with the FHFA announcing near the end of 2023 that it was raising the mortgage limit for single-family homes to nearly $1.15 million in some areas, compared to the standard limit of $766,550, allowing Americans to take out even larger government-facilitated loans.

To fund its rising expenses and facilitate more loans to lower-income and higher-risk borrowers, the FHFA has proposed a new rule that would allow the government entities to purchase second mortgages.

“But the reality is that you have to look at Fannie, Freddie and FHA as one big entity, its government mortgage: it’s all run by the government, and as a single entity, it’s tilting towards higher-risk loans and higher debt ratios.” Edward Pinto, senior fellow and co-director of the American Enterprise Institute’s Housing Center, told the DCNF. “So you may be able to handle that debt ratio for a period of time. It’s when economic stress increases that you find out; as Warren Buffett said, ‘It’s only when the tide goes out that you learn who’s been swimming naked.’ It’s not until the economic stress increases that you find out who’s over their skis in debt.”

Total debt reached an all-time high for Americans in the first quarter of 2024, with consumers holding a collective $17.69 trillion. Around $190 billion of the increase in the first quarter was in mortgage debt.

Following the 2008 financial crisis, the Consumer Financial Protection Bureau set standards for private lending so that mortgages could not exceed 43% of a borrower’s income. The FHA, Freddie Mac and Fannie Mae often try to meet these standards but are not required to due to their relationship with the government, meaning the entities can give riskier loans.

Pinto argues that while there is less tension in the housing system compared to 2008, an increase in the unemployment rate to around 6% from its current rate of 4% would leave enough Americans without a way to pay their debts that it could trigger a wave of defaults due to the increased number of risky loans. Stress in the system could be building in part due to the Federal Housing Administration (FHA) increasing the time frame in 2023 that mortgage holders can modify their payments, kicking the issue down the road.

“You can only do that so many times before you run out of the ability to do that and you spread that cost over everybody that has a mortgage so that those with good credits are paying for the risk of the poor credits, and what the federal government is doing through FHA, Fannie and Freddie is basically trying to eliminate risk,” Pinto told the DCNF. “You can’t have the housing finance system without foreclosure. Get the federal government through these forbearance programs, which are, in effect, eliminating the ability to foreclose.”

The cost of homes has increased rapidly under Biden amid high inflation, reaching an all-time high in March and rising 6.5% in just the last year. The average 30-year mortgage rate is also currently around 7% as of June 6, rising from under 3% when Biden first took office.

“The most dangerous FHFA proposal is a rule that would enshrine a ‘tenants’ bill of rights’ capping rents as a share of household income, providing free legal representation to tenants, and more, on any property financed by a Fannie or Freddie-backed mortgage,” Sorens told the DCNF. “This rule has not been finalized yet. If it were to go into effect, it would impose nationwide rent control on a large percentage of the multifamily market, which research has overwhelmingly shown will shrink the supply of rental housing and drive up rents for most tenants.”

The Biden administration has so far not announced concrete plans to cap rents, despite reports from the media citing unnamed administration officials in March saying that a plan to prohibit hikes of more than 10% a year on certain government-subsidized units was set to be released. The FHFA was charged at the behest of the Biden administration in January 2023 to examine putting “protections and limits on egregious rent increases for future investments.”

“It will also have the perverse consequence of driving business away from Fannie and Freddie and driving down the value of existing properties with government-insured mortgages,” Sorens told the DCNF. “As a result, the government mortgage guarantors could lose a lot of money. One major New York mortgage lender (NYCB) has already suffered credit downgrades and an investor bailout as a result of the tightening of rent control there.”

The White House did not respond to a request to comment from the DCNF.

[Swany00]

Of the 50 years in public office, he has 100% proven that he is a complete fuck up.

[KenHorse]

Oops, meant this to be in P&R. Could a Mod move it please?

[KenHorse]

Originally Posted by Swany00

Of the 50 years in public office, he has 100% proven that he is a complete fuck up.

We all know it's the Obama Cabal calling the shots. Of course He (may peace be upon Him) was going to push this through again

Cloward-Piven baby

[DDSLT5]

Originally Posted by KenHorse

We all know it's the Obama Cabal calling the shots. Of course He (may peace be upon Him) was going to push this through again

Cloward-Piven baby

Very accurate. And fucking ridiculous.

[Bill]

Originally Posted by KenHorse

Oops, meant this to be in P&R. Could a Mod move it please?

Probably better off here, where it will get more traffic, and thus, more participation. It's an important topic.

Housing IS seemingly in a bubble, aided by horrific government policy combined with institutional buyers like Blackrock scooping up single family homes. It would be nice if housing, and, well, everything, would level out and be more realistically priced, but I hope we don't have to have another 2008/9 housing crash to do that.





Rated thread 5 stars. Would read again.

[Yadkin]

I'm poised to take full advantage of this next housing crash.

[KenHorse]

Originally Posted by Bill

Probably better off here, where it will get more traffic, and thus, more participation. It's an important topic.

Whatever works!

Yea, I notice P&R doesn't get much traction......

[LATB]

Democrats caused the last real estate/mortgage meltdown. And given the opportunity they will again.

[KenHorse]

Originally Posted by LATB

Democrats caused the last real estate/mortgage meltdown. And given the opportunity they will again.

That's exactly the plan

As I previously pointed out - Cloward-Piven.

You familiar?

[LATB]

Originally Posted by KenHorse

That's exactly the plan

As I previously pointed out - Cloward-Piven.

You familiar?

Yes.

[Bill]

Originally Posted by LATB

Democrats caused the last real estate/mortgage meltdown. And given the opportunity they will again.

The last bubble burst, 2008, happened under the Bush regime, as I recall.

People whose main qualification for loans was they could steam up a mirror were getting loans on multi-hundred thousand dollar houses everyone knew up front they couldn't afford. I will agree the Dems were happy to go along with all that, though.

The crash was a uniparty failure.

[KenHorse]

Originally Posted by Bill

The last bubble burst, 2008, happened under the Bush regime, as I recall.

People whose main qualification for loans was they could steam up a mirror were getting loans on multi-hundred thousand dollar houses everyone knew up front they couldn't afford. I will agree the Dems were happy to go along with all that, though.

The crash was a uniparty failure.

Not exactly

FACT: Liberal Public Policy caused the mortgage crisis by mandating eased requirements for lending, even to people who had no chance of ever paying the loan back. If banks and other lending institutions did not comply, their "score" from the SEC was too low to permit certain business transactions such as merges, etc. This is nothing less than a gun held to the head.

FACT: Many lending institutions were sued or otherwise pressured by ACORN, forcing them to make loans to folks who didn't qualify nor had any chance of ever repaying that loan.

FACT: HUD (Housing and Urban Development) under Andrew Cuomo, head of HUD) browbeat banks to make loans to folks who they knew couldn't pay them back.

FACT: Many lending institutions were sued or otherwise pressured by ACORN, forcing them to make loans to folks who didn't qualify nor had any chance of ever repaying that loan. IN FACT, BARACK OBAMA WAS INVOLVED IN AT LEAST ONE OF THESE LAWSUITS



FACT: Fannie Mae's sole purpose for being was to offer a Federal Guarantee of loans. So banks and other lending institutions didn't need to worry about thing. If a loan went bad, Fannie Mae was there to pick up the pieces (until there were too many pieces to pick up)

FACT: The Democrats stacked the operations of Fannie Mae with other Democrats who then cooked the books (FM had to pay MILLIONS in fines to the SEC over this) and took HUNDREDS OF MILLIONS OF DOLLARS in bonuses and funneled MILLIONS in campaign contributions to members of Congress. Franklin Raines (part of the Obama Administration) personally took 90 million dollars despite Fannie Mae's fines and fraud.

FACT: Bill Clinton turned a blind eye to all of this during most of the 90's. In fact, he worsened the situation in 1995 by making the CRA even more lopsided and requiring even MORE bad loans. One thing he did was to force lending institutions to accept up to 31% of one's income for a mortgage whereas previously it was only 25%

FACT: The Democrats who run Fannie Mae took hundreds of millions in bonuses while Congressional Dems provided cover, including Charlie Rangel , Chris Dodd , Barack Obama and Joe Biden.

FACT: Democrat Chris Dodd was #1 recipient with Democrat Barack Obama being #2 in campaign contributions from Fannie Mae and Freddy Mac

FACT: The Democrats blocked every attempt by Republicans to investigate Fannie Mae and its business practices. In fact, the Bush Administration made over 30 attempts over his two terms in office only to have the Democrats block every one through parliamentary procedures as the Republicans, while controlling both Houses, NEVER had a super majority so the Dems could block anything they pleased (case in point - judicial nominees)





http://query.nytimes.com/gst/fullpag...gewanted=print

September 11, 2003
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By STEPHEN LABATON

WASHINGTON, Sept. 10— The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

Note the date

New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By STEPHEN LABATON

WASHINGTON, Sept. 10— The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

http://www.bucksright.com/bush-propo...n-in-2003-1141

A September 11, 2003 New York Times article shows that President Bush proposed “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.” His proposal: An agency within the Treasury Department to supervise mortgage giants Fannie Mae and Freddie Mac.

Fearing that mortgages would no longer be available to people who were unable to pay them back, Democrats eventually killed the proposal. The current meltdown in the mortgage industry is a direct result of giving mortgages to people who could not pay them back, a practice protected by Congressional Democrats.

Both entities were recently taken over by the government, a move that puts trillions of taxpayer dollars at risk.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

But Democrats in Congress, also known as “the caucus perpetually on the wrong side of history,” were having none of this “responsibility” stuff.

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

The proposal worked its way around Congress for a couple of years. Efforts at reform of the kind proposed by President Bush were shot down by Democrats each time.

In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill (H.R. 1461), and Fannie and Freddie’s lobbyists set out to weaken it.

[...]

During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, [Democrat in bed with the mortgage industry Chris] Dodd — who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 — actively opposed such measures and further weakened existing regulation.

According to OpenSecrets.org, between 1988 and 2008 Dodd received $133,900, Kerry $111,000, Clinton $75,550, and Obama — in only 143 days in the Senate — received a whopping $105,849 from Fannie Mae and Freddie Mac.

Pennsylvania Democrat representative Paul Kanjorksi, who also opposed new Fannie Mae and Freddie Mac regulations, was given more than any other member of the House of Representatives. He was paid $65,500 by representatives of these entities.

And, in case you were wondering, John McCain co-sponsored a bill requiring greater Fannie Mae / Freddie Mac regulation in 2005. It was also blocked procedurally by Democrats.

The 2003 New York Times article was unearthed by a Free Republic poster.

UPDATE: 2004 video posted to YouTube shows Republicans arguing for, and Democrats arguing against, regulations that would have saved us from the current crisis.

http://www.bucksright.com/congressma...ge-crisis-1451

Congressman Sorry Democrats Dropped Ball On Mortgage Crisis
Wed, Oct 1, 2008 at 10:55 am Posted by Steven in Economy

After being featured on Hannity & Colmes in a damning 2004 video showing Democrats fighting tooth-and-nail against greater Fannie Mae and Freddie Mac regulations, Democrat Congressman Artur Davis admits Democrats dropped the ball on reigning in the failed institutions and calls on fellow Democrats to do the same.

“Like a lot of my Democratic colleagues, I was too slow to appreciate the recklessness of Fannie Mae and Freddie Mac. I defended their efforts to encourage affordable homeownership, when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit that when it comes to Fannie and Freddie, we were wrong. By the way, I wish my Republican colleagues would admit that they missed the early warning signs that Wall Street deregulation was overheating the securities market and promoting dangerously lax lending practices. When it comes to the debacle in our capital markets, there is much blame to go around for both sides.”

Along with President Clinton, I take issue with Davis’ contention that equal blame exists on both sides. President Bush requested greater oversight in 2003, Republicans are clearly seen in the video fighting for greater oversight in 2004, and John McCain led the charge for greater oversight in 2005. All efforts were rebuffed by Democrats, who demagogued the issue with racial politics that made reform impossible to accomplish. At least they tried. I see no evidence of any push toward greater Fannie Mae / Freddie Mac oversight since the short bus rolled onto Capitol Hill in January 2007.

That said, I appreciate Congressman Davis’ candor in admitting Democrats let their ideology get in the way of what was right for the country.

[GixxerBill RIP]

Originally Posted by Yadkin

I'm poised to take full advantage of this next housing crash.

33 acre Florida swampland will be had for pennies on the dollar

[Yadkin]

Originally Posted by Bill

The last bubble burst, 2008, happened under the Bush regime, as I recall.

People whose main qualification for loans was they could steam up a mirror were getting loans on multi-hundred thousand dollar houses everyone knew up front they couldn't afford. I will agree the Dems were happy to go along with all that, though.

The crash was a uniparty failure.

It was orchestrated by Bwarny Fwank.

[KenHorse]

Originally Posted by Yadkin

It was orchestrated by Bwarny Fwank.

https://www.youtube.com/watch?v=ChShICWCim8

[Yadkin]

Originally Posted by GixxerBill RIP

33 acre Florida swampland will be had for pennies on the dollar

I won't be buying anything there.

[LATB]

Originally Posted by Bill

The last bubble burst, 2008, happened under the Bush regime, as I recall.

People whose main qualification for loans was they could steam up a mirror were getting loans on multi-hundred thousand dollar houses everyone knew up front they couldn't afford. I will agree the Dems were happy to go along with all that, though.

The crash was a uniparty failure.

And Ken covered it pretty well.

[WydGlydJim]

Yep Odumbo was 100% behind the last housing crash, as he was lead attorney on the 175 or so plaintiffs that sued to get loans that they had no business getting, and probably had no intention of paying anyway..........every single damn one of them defaulted on their loans, but by then loans had become politicized and qualifying was gutted, and so you had the crash due to a bunch of greed on both sides lenders, and borrowers........did they not learn a damn thing.......of course Odumbo rode off into the sunset and his role in the housing crash was forgotten, and swept under the rug...

[Frankie the Fink]

Yeah - the no-doc (no document loans) from the previous big crash were just ridiculous.