It's déjà vu all over again! Reports are coming in that the federal government is once again relaxing the rules regarding mortgages. The new rules being adopted by both Fannie Mae and Freddie Mac, the quasi-government mortgage insurers, decreased the down payment requirements from 5% to 3%.
Mel Watt, director of the Federal Housing Finance Agency said, "Through these revised guidelines, we believe that the enterprises will be able to responsibly serve a targeted segment of credit worthy borrowers with lower down payment mortgages by taking into account compensating factors. It is yet another much-needed piece to the broader access-to-credit puzzle."
You may have noticed that Watt used the code words, "targeted segment," which, of course, means minorities.
So who is Mel Watt? Well back in January, IBD warned us all of who he is. They wrote: "We warned that Watts swearing in as head of the Federal Housing Finance Agency would mark the start of the next housing bubble. We pointed out the Congressional Black Caucus former head has a soft spot for those who can't afford homes and that as a Democrat lawmaker he pressed Freddie to lend even to 'welfare recipients' in his district."
In other words, Mel Watt is a Social Justice Racialist.
IBD also warned to expect Watt to restart the easy money programs that allowed those who couldn't purchase a doghouse to finance a McMansion for the same reasons as the last go round. It's unfair and racist to deny homeownership to hard-working Americans.
The Chicago Tribune reported that "Watt also announced other policy initiatives to make lenders more comfortable with the federal government's mortgage purchase guidelines in the hope it will loosen their purse strings."
Of course, there will be no explanation – at least, not from the mainstream media – other than proof of an ever-improving Obamaconomy, which, like everything else, will be smoke and mirrors.
Actually, in this case, it will be more like smoke and fire.
Watt said in prepared remarks that he wants lenders to "more aggressively make responsible loans available to credit-worthy borrowers."
Buckle Up – Again!
And so it begins, just as it did before the bubble burst in 2008. Lenders will sell mortgages to Fannie and Freddie. Oh, they'll be viable, at least the majority, at first. As they did during the 2000s, Fannie and Freddie will "package" them into mortgage-backed securities and sell them to investors, as they have done; and, of course, the "investments" are guaranteed by the government – you and me, like last time.
And just like last time, everything will go along fine until the "Social Justice" bus shifts to a higher gear, once again insisting that homeownership is some sort of "right," especially for minorities.
Credit-worthiness will again begin to be further relaxed and history will repeat itself once again, although this time, it won't take as long to implode as it did the first.
One contributing factor may be that in September, "Fannie Mae shortened the waiting period that homeowners who have gone through a bankruptcy, a foreclosure, or a short sale must wait before they can again purchase a home," reports the Tribune.
This is all an effort to coax first-time homebuyers. But Pradeep Shukla, president of the Main Street Organization of Realtors, says, "Lenders are still very cautious. On the whole, what is most important is consumer confidence, and that is still lacking."
So, once again, the federal government feels it must step in and upset the balance of the market and throw that "caution" to the wind. IBD reports that, "The easier guidelines are designed to convince lenders that they won't regret lending to high risk, less-than-credit worthy borrowers. Unlike previously, they'll no longer be penalized with higher fees or repurchase demands if they make risky loans."
And it just keeps getting better! Seriously, are we the dumbest country on the planet? Answer – yes!
This debacle will be allowed to repeat because of the ridiculous misinformation campaign that took place last time – masking the real reason for the 2008 meltdown. What the Obama administration is doing is exactly what Carter and Clinton did to cause the last disaster; but this time, it is being put into hyper drive, or "Ludicrous Speed" (Spaceballs), so what took decades to meltdown may only take a few years to repeat. Anyone needing a refresher on the real cause of the first bubble may read this article from a few years ago.
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