The Democrats appear to never learn from their previous mistakes. Or, it could be they know what they are doing as an excuse to further extend government power. Sin of omission or commission, still a sin.
“We learned nothing from the last financial crisis. The housing market is set to collapse, again, and a key culprit, again, is artificial demand created by government policies.
For starters, mortgage-software firm Ellie Mae reports that the average FICO credit score of an approved home loan plunged to 719 in January (the latest month for which data is available) from 731 a year earlier, and well below 2011’s peak of 750.
It’s a dangerous sign lenders are loosening underwriting standards. Lower FICO scores correlate with higher risk of loan default.
The Federal Housing Administration is a big reason for falling credit scores. So are Fannie Mae and Freddie Mac. The government housing agencies have slashed credit requirements under pressure from the Obama administration — like the Clinton administration before it — to qualify more immigrants and minorities with low incomes and “less-than-perfect credit.”
Meanwhile, home lenders are approving more debt-strapped borrowers. According to Ellie Mae, applicants approved for mortgages in January had an average household debt-to-income ratio of 39%, up from 2012’s annual average of 34%. Borrower debt loads have been creeping higher each year since 2012, when Ellie Mae first started tracking such data.
A recent report by the Office of the Comptroller of the Currency, a federal agency that regulates the nation’s banks, warns that declines in mortgage underwriting standards are mirroring pre-crisis trends.
“Underwriting standards eased at a significant number of banks for the three-year period from 2013 through 2015,” the report said. “This trend reflects broad trends similar to those experienced from 2005 through 2007, before the most recent financial crisis.”
Not since 2006, it noted, have lenders taken on so much credit risk, and it says the hazard will continue to grow this year: “Examiners expect the level of credit risk to increase over the next 12 months.”
A large chunk of the risk is coming from first-time home buyers with shaky credit and so-called “rebound” buyers who previously defaulted on home loans.”
http://nypost.com/2016/03/12/o...other-housing-crash/