Feds Turn to Housing Market to Boost Slow Recovery

The Washington Free Beacon reports:

Federal regulators are attempting to lower credit and lending standards for home mortgage loans during a time when there is little demand for housing, some experts say, a move that could create another destabilizing bubble if the economy improves.

The Federal Housing Finance Agency (FHFA) and other government regulators have announced steps in recent weeks that would ease access to housing for high-risk borrowers. FHFA oversees Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that taxpayers were forced to bail out in 2008 after the risky home loans they purchased defaulted.

However, it remains unclear whether taking out risky, large mortgages would be a wise financial decision for many Americans, even if mortgage credit could be made more easily available. Wages are stagnant for many Americans, and more young adults saddled with student loan debt are choosing to live with their parents.

Uncle Sam, the bubble man.