Well, this is a stupid idea. Here’s the part that I find particularly angrifying:
Beginning in the 1990s, the federal government made the disastrous mistake of promoting and increasing the amount of risky mortgage loans in the pursuit of increasing home ownership, notably requiring Fannie and Freddie to buy more and more such loans. The riskier loans were promoted as “innovative” mortgages by the Clinton administration. That push was a major contributor first to the housing bubble and then to the housing finance collapse of 2007–09.
In this case, the FHFA wants to politically manipulate Fannie and Freddie’s Loan-Level Price Adjustments (LLPAs). The LLPAs are meant to be credit risk-based adjustments, which reflect fundamental factors in the credit risk of a mortgage loan, to the price of getting Fannie or Freddie to bear the credit risk of the loan. They are an adjustment to the cost of the loan to the borrower, supposed to be based on objective measures of risk.
Welcome to More Government Interference in Markets, Version 6,927,394. This kind of crap was the genesis of the 2008 housing market crash. Now we’re looking at economic illiterates in the Imperial City again doubling down on stupid. I swear, it’s idiots all the way down. Read the whole thing, and if it doesn’t piss you off, you probably aren’t really paying attention.
On To the Links!
This Week’s Idiots:
MSNBC’s Steve Benen is an idiot. Is it just me sensing this pattern every week?
OK, that’s all the stupid I can take this week. I really do read these, you know.
This Week’s Cultural Edification:
Summertime is coming!
Those of us of a certain age remember acts like Mungo Jerry, who are probably best known for their 1970 hit In The Summertime. Lead singer and writer Ray Dorset later claimed he wrote the song in ten minutes, and if you give it a listen, it’s not really an implausible claim. Still, it’s a fun little tune, and still gets my toe tapping, even fifty-some years after I first heard it. Oh, and Dorset rocks those big Seventies ‘burns. Here it is – enjoy!