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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWaPo - Federal government has dramatically expanded exposure to risky mortgages
Here is just another example of how the Trump administration has been trying to artificially goose the economy by returning to the liar loan days of the Bush administration.
https://www.msn.com/en-us/money/realestate/federal-government-has-dramatically-expanded-exposure-to-risky-mortgages/ar-AAIcp3f
Now, Fannie Mae, Freddie Mac and the Federal Housing Administration guarantee almost $7 trillion in mortgage-related debt, 33 percent more than before the housing crisis, according to company and government data. Because these entities are run or backstopped by the U.S. government, a large increase in loan defaults could cost taxpayers hundreds of billions of dollars.
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In 2019, there is more government-backed housing debt than at any other point in U.S. history, according to data from the Urban Institute. Taxpayers are shouldering much of the risk, while a growing number of homeowners face debt payments that amount to nearly half of their monthly income, a threshold many experts consider too steep.
Roughly 30 percent of the loans Fannie Mae guaranteed last year exceeded this level, up from 14 percent in 2016, according to Urban Institute data. At the FHA, 57 percent of the loans it insured breached the high-risk echelon, jumping from 38 percent two years earlier.
FBaggins
(26,729 posts)It doesnt mention the Trump administration (other than as not undoing the prior administrations changes) and the stated income issues (liar loans) of the crash are not mentioned. The increased risk appears to be related to higher DTI ratios intended to increase minority home ownership.
Vinca
(50,267 posts)another person stay in front of the computer and do the appraisal having never seen the property. Also, they will make it easier to waive appraisals completely. They might as well throw darts at a dart board to determine the value of what they're giving a mortgage on.