Government created the housing bubble and financial crisis --- and could be doing so again

The Washington Examiner reports:

The argument, as in the 1990s and 2000s, is that traditional standards are misleading and unduly prevent low-income and minority households from buying homes.

Fannie and Freddie are now purchasing the large majority of mortgages and announced last month they would buy mortgages with only 3 percent down payments. The qualified mortgage standards laid down by HUD and other regulators in October allowed for mortgages with zero down payments.

That sounds like a recipe for another housing bubble — and for mass foreclosures, which hurt the policies’ intended beneficiaries — and perhaps for another financial crisis as well.

When the free market regulate risk : it demands collateral.