Home ownership at 18 yr. low. It's mean and not 'inclusive' not to let everyone have a dream house, so US to ease mortgage qualifying again, which is what created the subprime crisis and current depression

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"“So the question now is do we want to do this again?”" former Deutsche Bank mortgage exec asks.

7/30/13, "American Dream Slipping as Homeownership at 18-Year Low," Bloomberg, Gopal, Benson

"The U.S. homeownership rate, which soared to a record high 69.2 percent in 2004, is back where it was two decades ago, before the housing bubble inflated, busted and ripped more than 7 million Americans from their homes.

With ownership at 65 percent and home values rising, housing industry and consumer groups are pressing lawmakers to make the American Dream more inclusive by ensuring new mortgage standards designed to prevent another crash are flexible enough that more families can benefit from the recovery. Regulators are close to proposing a softened version of a rule requiring banks to keep a stake in risky mortgages they securitize, according to five people familiar with the discussions.

Lawmakers currently shaping housing finance are seeking to reduce the government’s role in keeping rates affordable for riskier borrowers while ensuring homeownership is within reach of minorities and first-time buyers who could be needed to sustain the housing recovery as borrowing costs rise from record lows. Who will be able to buy property depends on the balance they reach, according to Anthony Sanders, a professor of real estate finance at George Mason University in Fairfax Virginia.

“Low down-payment loans coupled with exotic adjustable rate mortgages helped fuel a massive housing bubble, which ultimately burst and took down the financial sector,” said Sanders, who was the former head of mortgage-bond research at Deutsche Bank AG. “So the question now is do we want to do this again?” 

The homeownership rate in the second quarter was unchanged from the prior three month period, according to Census Bureau data released today. It will hit bottom at about 64 percent in the next year as families leave the foreclosure pipeline and enter rental homes, according to a May analysis by London-based Capital Economics Inc. It’s currently the lowest in almost 18 years after averaging about 64 percent for 30 years through 1995.

First-time buyers and minorities are among the groups that have seen the sharpest declines since the crash. While property ownership among senior citizens was little changed at about 81 percent, the share below age 35 that own a home fell to about 37 percent from almost 42 percent five years earlier.

The rate for blacks reached almost 50 percent in the second quarter of 2004 from about 43 percent in 1995, Census Bureau data show. By the second quarter of this year, it had dropped to 42.9 percent. The rate for whites fell to 73.3 percent in the second quarter, from 76.2 percent in 2004.

In the midst of a new economic push, President Barack Obama, who spent much of his first term managing the foreclosure fallout, is now turning to buying homes. ...

Presidents have been promoting homeownership at least since the Federal Housing Administration was created by Franklin Delano Roosevelt in 1934 to insure mortgages so more borrowers could qualify. Over more than 50 years, administrations touted property buying as a way to put lower-income families on a path to social and financial stability by forcing savings and making for a more involved citizenry.

Successive Clinton and Bush administrations unleashed ambitious programs to widen buying. Clinton’s “National Homeownership Strategy” in 1995 set a goal of allowing millions of families to own homes, in part, by making financing “more available, affordable, and flexible.”

President Bush credited his policies with homeownership reaching an all-time high after he set a goal in 2002 of allowing 5.5 million poor and moderate-income and minority families to buy homes so that “everybody who wants to own a home has got a shot at doing so.”

At the center of these efforts were Fannie Mae and Freddie Mac, which financed mortgages for low- and moderate-income borrowers according to goals set by the federal government that steadily increased until 2008.

As Wall Street helped create subprime and riskier mortgages for borrowers with low credit scores and zero down payments, Fannie Mae and Freddie Mac bought more of the loans to meet those targets.

After house prices peaked in 2006 and then fell as much as 35 percent, defaults surged and the companies required a $187.5 billion bailout from the taxpayer."...via Drudge

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Comment: The left is realizing George Bush was one of them. He's grouped here with FDR and Clinton to sell the idea that even though the US is in a permanent depression because of subprime borrowing, Obama should be able to encourage risky loans again without criticism because others like FDR, Clinton, and Bush did.


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