Now comes the main stream media editorializing that the Attorneys General settlement against mortgage banks, is a good first step to fix the home crisis. This should be expected from overtly Obama-supporting, big -government, progressive editors and publishers. Of course government and lawsuits are the solution to the housing crisis. To liberals the government is the solution to all that ails mankind.
Short and sweet, here is what Ronald Reagan said; the more the plans fail the more the planners plan. This is a textbook example. Federal bureaucrats and politicians caused the housing crisis resulting in the financial meltdown.
What crime did these banks commit? They followed government orders to lower lending standards to make loans to low income families. A great example of liberal and progressive good intentions. The Great Society? Destroyed many of our societies, see Detroit or any other liberal big city. Making home ownership affordable with loans for those who were not qualified? Destroyed the housing market.
From Investors Business Daily an article regarding the housing meltdown. Quoting from the article; “Audacity of dishonesty hijacks the truth in lending.”
According to Peter Ferrara, senior fellow at the Carleson Center for Public Policy:
“This over regulation reached the point of forcing lenders to discount bad credit history, no credit history, no savings, lack of steady employment, a high ratio of mortgage obligations to income, undocumented income, and inability to finance down payment and closing costs, while counting unemployment benefits and even welfare as income in qualifying for a mortgage.”
“This” he said, “turned into government-sanctioned looting of the banks.” [end quote]
The crime according to Attorney General Lisa Madigan is that the process is infuriating regarding the loan modification program HAMP. Seems hundreds of thousands got bogged down for months in red tape. Who wrote the procedures for HAMP? Government.
Certainly many banks were overwhelmed by applications and in many cases the left hand didn’t know what the right hand was doing. But they were following a hopeless plethora of government dictates that bogged the system down. The planners plans fail again.