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Obama administration is creating another housing crisis

Posted by Richard on August 2, 2012

Pretty much everyone agrees that the financial crisis of 2008 was precipitated by the collapse of the housing bubble and subprime mortgages.

The left blames “predatory lenders” who somehow coerced or swindled borrowers into signing up for mortgages they couldn’t afford.

The right blames government regulations and intimidation, corruption and irresponsible practices at Fanny Mae and Freddie Mac, and lawsuits and intimidation from non-profits like ACORN for pressuring banks and mortgage institutions into making countless bad loans, which they then turned into CDOs and other derivative instruments in a futile attempt to avoid the consequences.

Unlike the left, which has only demagoguery and accusations, the right has facts to support its view. See also this and especially this.

But in any case, everyone pretty much agrees that vast numbers of loans to borrowers who would never be able to repay them were the root of the problem.

So why is the Obama administration trying to coerce lenders into making vast numbers of loans to borrowers who will never be able to repay them?

Well, this time it’s different. Because this time it’s not Fannie Mae, Freddie Mac, and the Community Reinvestment Act. This time it’s the Consumer Finance Protection Bureau, a creation of Dodd-Frank (two of the prime architects of the 2008 crisis). This time they’re also going after the credit rating agencies.

And this time the subprime mortgages, lowered credit standards, and liar loans are limited to just blacks and Hispanics. Who will no doubt be protected from the consequences of whatever irresponsible choices they may make by the beneficence of the redistributionist Obama administration (if it continues for another four years).

Or maybe this time it will lead to yet another housing bubble ending in yet another housing collapse leading to yet another round of smaller financial institutions going under or being absorbed by the “too big to fail” institutions that have friends in Washington looking out for them — who will once again be bailed out at the expense of taxpayers who acted responsibly.

Read the whole thing.

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