Tuesday, October 12, 2010

Result of the Fan Fred fiasco? Effective nationalization of the Mortgage market via FHA

And of course FHA is effectively bankrupt.

There has not been a lot of discussion on whether or not it makes sense for the Federal government to essentially nationalize the mortgage industry, but that is what is occurring today.  FHA loans are now the only loans in town since their low down payments and rock bottom interest rates drive out competitors at their price levels.  And it is only a matter of time before the FHA raises their cost limits which would further their dominance in the market, leaving only the high end for other types of mortgages.

Economic fascism usually works this way:  first they manipulate markets until they collapse and then the manipulators step in to 'save the day' because the 'failure' of the 'markets' leave them 'no choice' but to intervene.  It's the plan with Obamacare (the markets are well on their way to collapse, there, too).

And yet the same people who believe they can micromanage whole swathes of the economy can't even pass a budget.

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