Barny Frank and one of his pals has requested Fannie Mae and Freddie Mac relax regulations on mortgages again. Seriously, do they think it'll have a different effect this time?
Let me go over what happened:
1. Regulations were relaxed to allow those who didn't qualify for lending under the old rules (which determined who could borrow by who could afford to pay it back).
2. A whole lot of people took out loans for which they couldn't afford the payments.
3. A whole lot of people defaulted on their loans, which hit the banking and housing industries hard enough to make the entire economy go splat.
4. A whole lot of people who thought they could afford a home because they were told they could were victimized.
What will happen when the regulations are relaxed again, for people to be able to purchase condos? I mean, it certainly won't happen the same way the second time that action is taken, right?
6 minutes ago
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