Rebirth Of The Toxic Twins
Subprime Redux: Mel Watt's easy credit crusade is now off and running. Fannie Mae and Freddie Mac's chief regulator has officially lowered lending standards for the entire mortgage industry. Here we go again.
In January, we warned that Watt's swearing-in as head of the Federal Housing Finance Agency would mark the start of the next housing bubble. We pointed out that 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.
"Expect him to reboot the era of easy credit," we warned. "Watch him use his control of Freddie and Fannie to return to the recklessly lax policies that caused the mortgage crisis."
Now comes news that he and the nationalized mortgage giants have drawn up new rules aimed at loosening underwriting standards to make home loans more affordable and easier to get for low-income borrowers with poor credit.
No longer will Fannie and Freddie require down payments of at least 5% for conventional loans. Now it will buy mortgages with a minimum down payment of 3%, mimicking what took place before the mortgage crisis and matching the subprime standard set by the Federal Housing Administration.http://news.investors.com/ibd-edito...m#ixzz3Gq3aKjogSee how that works? This explains a lot about how Detroit went bust.
90% of life is "showing up"