Put the blame of the housing collapse where it belongs

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Put the Blame of the Housing Collapse Where it Belongs Government meddling in the free markets is usually where all trouble starts. The Federal Housing Administration, created in 1934, were given power to insure mortgages up to 100%. It required a 20% down payment and operated just fine for 25 years with hardly any bankruptcies because borrowers had skin in the game. In 1957 the good old boys in Congress slacked up the standards to jump start the growth in housing. Down payments were deflated down to 3% from 1957 to 1961. Housing Boom Resulted As prophesied this resulted in a FHA boom in insured mortgages and a bubble burst in the later 60’s. This pattern keeps reoccurring and no one seems to remember the earlier mistakes. Keeping the Feds out of the game of


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