economy
Don't cut corners to ease cost of mortgage lending
From 1940 to 1960, the rate of homeownership in America grew from 44% to 62% — a dramatic change in how Americans went about housing themselves and their families.
TL;DR
- Homeownership rates in America rose dramatically from 1940-1960 but have stagnated since the mid-1990s.
- Past government interventions, like those involving Fannie Mae and Freddie Mac, led to increased homeownership but also contributed to the 2008 financial crisis.
- A proposed change to mortgage lending would reduce credit checks from three bureaus to one or two, aiming to cut costs.
- Critics argue this change, saving only about $70 in closing costs, could allow unqualified borrowers to get loans, increasing financial risk.
- The Federal Housing Administration continues to use the tri-merge model, which is recommended to avoid repeating past mistakes.