Team Obama has pushed mortgage lenders to offer home loans to folks with shaky credit, setting up conditions for another housing-market collapse. …
Credit scores of approved borrowers, for example, have been trending down, even as their debt levels have grown.
The Federal Housing Administration and government-sponsored “independent” lenders Fannie Mae and Freddie Mac have been demanding lower credit standards — just as the feds did starting under President Bill Clinton, in pursuit of the same “affordable housing” goal.
Some borrowers need only put 3 percent down to get a Fannie Mae loan — even if the downpayment is a gift. Fannie also has started up a new subprime-lending program.
The Office of the Comptroller of the Currency recently warned that mortgage underwriting standards have slipped and now reflect “broad trends similar to those experienced from 2005 through 2007, before the most recent financial crisis.”
When the economy and housing prices turn south again, a lot of these loans will go bad, just as they did last time.
Supposedly it won’t cause a global financial meltdown this time around. But someone will have to pick up the tab. Guess who?