Now we know that the lending industry faced a problem in the billions of dollars because bad loans to those who could not afford the loans. Specifically do to policies forced upon the lenders by Washington in the name of political correctness and equality. "It is a right to own a home" attitude by liberals, mixed with poor, or should I say lack of responsible lending practices in order to make a healthy profit. All which combined to create the meltdown of the housing mortgage industry.
Loans that were pay interest only, with massive balloon payments due in future short term years. Owned by those who could not afford these balloon payments even with a second loan, caused the bubble to burst. Experts, real experts are warning that another bubble will burst within the next year as the five year balloon payments come due.
So what did our Washington experts do? They injected monies that have no backing into a busted system in order to support poor decisions for greed and political purposes of being reelected by gullible voters who thought that they were being given a present financially.
Other factors contributed and will contribute as local administrations at county levels add to the absurdity of the housing bubble. They do this to raise their tax base. By artificially inflating the value of properties two and three times higher then the true worth of a property. They are able to charge more in taxes. This leads to banks and others to make loans appraisals artificially inflated on a value that is not true. With the support of the federal government in this scam. The policies that allow this to happen. The government then condemns the banks for aiming the loans to high for the average family to afford. Hypocritical condemnation by those who caused it.
A vicious cycle of greed lead by liberal thinking. If you own something at a higher value then it is worth, then you have more in assets and are worth more. Artificial wealth at the cost of reality.
This being said we know that loans are being made to those who cannot afford the over priced homes, so the government tells the lending institutes that they must loan the money. Again where is this money coming from? The same place that all money is currently coming from. Thin air with a value of nothing more then the paper it is printed on. Backed with an artificial value.
So what does the Obamanation administration do. They are calling upon the two biggest fraudulent lenders to loan more mismanaged money to those who cannot afford it. By removing the $400 billion cap on the backing of Fannie Mae and Freddie Mac. The creation of a new and more debt sponsored breakdown in the economy is assured.
At a time when "TAX AND SPEND" policy seems to be the plan of action on a debt ridden economy. Does it not seem stupid to continue to spend when you do not have the money?
I suppose one can always answer the phone with a debt collector by saying not to worry, Obama is paying for it.