Dodd and Frank are at it again
"Affordable Housing" is the catchphrase being used again to justify sub-prime loans to almost anyone, regardless of ability to pay. Pushing these absurd loans that were bundled and sold to the taxpayers via Fannie Mae and Freddie Mac, is coming around again.
"The complex and convoluted Dodd-Frank structure is not the answer, but underwriting standards are necessary to protect the taxpayers and the economy, and no one in this coalition wants to impose them. History, after all, should tell us something. The same arguments were made to Congress in the late 1980s and early 1990s, when Fannie Mae and Freddie Mac, following the command in their government charters that they buy only loans that would be acceptable to institutional investors, were imposing tough underwriting standards on the loans they would buy and securitize. The standard downpayment then was 20 percent, and it yielded a home ownership rate of about 64 percent, where it had been for roughly 30 years.
"But Congress ultimately heeded the same calls we are hearing today: the standards are too tough; there are groups who cannot get mortgage credit and buy homes; and the familiar language of entitlement - it's a "civil rights" issue that some people cannot buy a home because they don't have sufficient savings. In 1992, Congress required Fannie and Freddie to abandon their underwriting standards and instead - for at least 30 percent of the loans they acquired - to buy only "affordable housing" mortgages, without regard to their quality."