According to Anthony Randazzo, director of economic research at Reason Foundation, the federal government’s continued belief that everyone should own a home is what created the housing bubble in the first place, and it could happen again. Writing in the Orange County Register, he says with Fannie Mae and Freddie Mac being propped up to the tune of $187 billion, and continuing to offer subsidized insurance to mortgage investors with no upper limit on the size of the loans they may purchase could lead to another meltdown. The Bipartisan Policy Center, which includes two former HUD secretaries and Sen. George Mitchell, proposes phasing out the GSEs within five to ten years and replacing them with a new entity that would not buy mortgages but would offer catastrophic insurance against another meltdown. As MHProNews has learned, that would continue to leave the government on the hook for another bailout, protecting the banks and investors once again.
