Wallison’s thesis is that policymakers in Washington underestimated the significance of the surge in nontraditional mortgages. What is perhaps even more deplorable is the way that these mortgages continue to be downplayed in the mainstream narratives of the crisis and in the policy responses that followed.
Meanwhile, CNN Money reports on programs that offer 3 percent down payments.
The new loans will only be doled out to those who buy private mortgage insurance, have a credit score of at least 620 and offer complete documentation of their income, assets and job status. And, to further mitigate risk, the agencies will require borrowers to receive home ownership counseling.
Once again, the government is pushing home borrowership, setting households up to fail and making the housing market more speculative. Of course, when the stuff hits the fan, the government officials involved will blame lenders, not themselves.
Don’t we all recall when Mozilo embraced that lack of difference between renting and owning and shouldn’t need equity? Yet, that is always government failure. No, they couldn’t possibly be at fault, as they refuse responsibility for anything.