Deja Vu

Remember way back in 2008 and The Housing Crisis? Well, who can forget! Here it is 2010 and we STILL have a housing crisis......a housing crisis built on bad loans, bad loan policies, and bad political policy that in essence said it is a fundamental right to own a home.

So we put a lot, a whole lot, of people into homes who could not afford them. And we let a lot, a whole lot, of people speculate in real estate who had no business doing so. And who greased the wheels for this? Freddi and Fannie.

So did we learn our lesson from this disastor? Apparantly not, because we are at it again, read it all here.

Faced with the utter failure of its TARP funded mortgage bailout, the Obama administration is now turning to the left’s old stand-in for housing market interference: the government-sponsored entities (GSEs) Fannie Mae and Freddie Mac. Fannie Mae is now working with the National Council of State Housing Agencies to let people buy houses with little or no down payment just like the GSEs did at the height of the housing bubble. And last week, Freddie Mac was also promoting no-down payment loans, this time through an array of Housing and Urban Development (HUD) programs. All this despite the fact that last week Fannie Mae announced it lost $1.2 billion in the second quarter of this year, and this week Freddie Mac announced a $4.71 billion loss. Both companies were also forced to ask for more Obama bailout cash, including $1.5 billion of your tax dollars for Fannie and another $1.8 billion for Freddie.

No wonder the Dodd-Frank financial regulation bill did nothing about Fannie and Freddie; the Obama administration had every intention of continuing to use them to prop up the housing market. These programs will do nothing but delay the inevitable housing market correction. Instead of letting the market sort out what these homes are really worth, the Obama administration is only prolonging economic hardship by making it harder for new home buyers to afford a moderately priced home and making it harder for those who need to move for work to sell their current homes.

Two Wrong/Bad Policies do not make the Economy Right.