Source: Law & Liberty
by Alex J Pollock
“Beginning in the 1990s, the federal government made the disastrous mistake of promoting and increasing the amount of risky mortgage loans in the pursuit of increasing home ownership, notably requiring Fannie and Freddie to buy more and more such loans. The riskier loans were promoted as ‘innovative’ mortgages by the Clinton administration. That push was a major contributor first to the housing bubble and then to the housing finance collapse of 2007-09. … The housing politics and the enjoyment of its power seem to have gone to the FHFA’s head. … it is trying once again to encourage riskier mortgage loans in Fannie and Freddie. Moreover, it proposes to act as if it were the Congress, trying by its own rule to mandate what are effectively taxes on mortgage borrowers with good credit, in order to provide subsidies to riskier borrowers with poor credit.” (05/22/23)