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Government shouldn’t mess with mortgages again

August 16, 2013

Government tinkering with the mortgage market helped bring on the deep recession from which Americans are just now emerging....

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Aug-16-13 11:47 AM

The government "tinkering" that contributed to the recession was deregulation of the banking industry. It was not low interest loans that sunk homeowners. It was the "bait and switch" of ARMs. Sucker them in with an initial low rate they can afford that then explodes higher and causes a default. Are the homebuyers also responsible? Sure, just like any sucker is.

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Aug-19-13 12:32 PM

Community Reinvestment Act, Tax Reform Act of 1986, Taxpayer Relief Act of 1997, Garn–St. Germain Depository Institutions Act of 1982, Gramm–Leach–Bliley Act of 1999; for starters. Fannie Mae and Freddie Mac promoted a loosening of lending standards - industry-wide. In the wake of the dot-com crash and the subsequent 2001–2002 recession the Federal Reserve dramatically lowered interest rates to historically low levels, from about 6.5% to just 1%.

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