The Patriot Post® · Housing Crash 2.0

John Stossel: “Because our government subsidizes home purchases, recklessness is invited. Somehow, Americans buy cars, clothing, computers, etc. without government guarantees, but politicians think housing is different. … After the bubble popped, I assumed the political class would learn a lesson, but they haven’t. Today, even more American mortgages are guaranteed by government. More than 90 percent of new loans are backed by taxpayers. After the crash, Fannie and Freddie did raise their minimum down payment – to a measly 5 percent – but a few months ago, they lowered it again to 3 percent! … [M]ore rules aren’t a solution. Government’s regulators didn’t foresee the problems last time. Fannie and Freddie got a clean bill of health right up until the collapse. The solution is less government involvement. Canada doesn’t have a Fannie, Freddie or FHA. Canada didn’t have the trauma of a housing bubble. In Canada, lenders and homeowners risk their own money. Does that mean Canadians cannot afford homes? No! Without all that government help, Canada’s homeownership rate is higher than ours.”