Triple damages against banks for undocumented FHA loans have them wanting to no longer offer them.
Anyone could have seen this coming. You bite the hand that feeds you and guess what? No more food. Banks have been fined three times the price of the loan for as much as a typo. So obviously they see this kind of loan as unprofitable and no longer want to write them. Who gets hurt? The poor are hurt because they get their loans through the FHA. And I ask you. Which party did this?
All they had to do was pass a law that loans had to be fully documented and that if any loan went bad that the bank who wrote it would be partially liable for the losses enough to make sure they would not want to write a bad loan. That was it. It would have solved the whole problem. But the Democrats wanted blood and now no one will be willing to write these loans. Morons.
The funny thing about this is that the only people who would care about this are Democrats. You Democrats really need to start electing smarter people. The ones you have been electing are making things worse.
Personally I don't think they do it on purpose. They are just too dumb to perceive ahead of time what the consequences of their actions will be until they see it after it is too late. Smart people don't do that. Smart people comprehend it before it happens and act accordingly. This isn't what is happening folks.
It was back in the Clinton administration that Fannie and Freddy were mandated to buy and guarantee no-doc loans which created a market for those iffy loans and set up the housing market for the eventual crash. Previously, banks would not have been able to sell those loans and certainly wouldn't have kept them on their books since they were so high risk.
Low down payment and no-doc loans were enabled by liberals who wanted poor people to own their houses regardless of whether they were able to pay for them. After the crash government blamed the evil banks, but it was the government that created the market in the first place. The banks just took advantage of the situation.
It was worse than that. The banks didn't want to make no doc loans because they were afraid of the liability but Fannie and Freddy told them that if they didn't make them that they would not buy their good loans. So basically they were forced into making these bad loans. And then the government sues them as a political move because it makes them look like they are doing something but all they are really doing is showing everyone how dumb they were in the first place for encouraging the banks to make these loans. Of course if you are uninformed and believe everything they tell you then you will believe what they say. Most of the time that is the case.
Eventually it will go full circle again. PACs will start pressuring the government about the poor not being able to get loans and this will cause the government to pressure Fannie and Freddy. They in turn will pressure the banks and this will lead to another financial crisis. The Republicans will fight all these efforts to get banks to make bad loans but in the end Democrats will blame Republicans as if somehow they were part of the ruse.
It is like being trapped in one of those circular scenss you see on the twilight zone except this is really happening.