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The government "gets involved" when people can't qualify for loans. They lower the qualifications with no regard to future payback or the credit worthiness of the borrower.
When the government went into the mortgage business it gave money to people who couldn't pay it back.
When the government went into the student loan business it gave money to people who couldn't pay it back.
See a pattern here ?
Now the government went into health insurance and .......
Lets see, we have liberals that invited the gvt with open arms to be involved in education and now are crying the blues for letting them get their foot in the door.
Don't expect them to be able to understand how they willingly participated in their own financial destruction.
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Priceless, maybe they will think of Reagans words " I am from the gvt and I am here to help "
Loans have a stated interest rate on the note. When borrowers sign the note, they agree to the interest rate and repayment schedule. Not tough concepts. Don't like the loan terms? Don't borrow the money.
Even the ones they had no desire to tell us about?
What you are about to read should absolutely astound you. During the last financial crisis, the Federal Reserve secretly conducted the biggest bailout in the history of the world, and the Fed fought in court for several years to keep it a secret.
Loans have a stated interest rate on the note. When borrowers sign the note, they agree to the interest rate and repayment schedule. Not tough concepts. Don't like the loan terms? Don't borrow the money.
Those giving the loans also know that there will be defaults. If you aren't willing to accept the losses of those defaults dont come crying to me to make sure the losses are covered.
The left were jumping for joy when Obama announced that Uncle Sam was taking over the student loan business so that everyone could go to college.
Stats have shown that barely 50% of those that enter a 4 year college graduate.
Stats have shown that barely 30% of those that enter a 2 year college graduate.
But Uncle Sam won't deny anyone a loan to go to college.
So now with sit with over $1.2 trillion in outstanding student loan debt and the average student loan debt is $29K. In 2012 it was only $26K. This is how the government comes to the rescue ?
6.8 million young adults have defaulted on their loans.
Those giving the loans also know that there will be defaults. If you aren't willing to accept the losses of those defaults dont come crying to me to make sure the losses are covered.
When it's taxpayer money you WILL be responsible for covering the losses.
And the last reported default total was near $100 billion.
The Dept of Education is very slow to publish this info (they are a year or two behind).
The banks knew what they were getting into when the colluded with the government in the housing debacle also. What happened there?
Not really. Banks and lenders originated the loans the GSEs, which had specific affordable lending goals dictated by HUD, needed to buy.
Anyone looking at HUD's Affordable Lending goals for the GSEs (the GSEs controlled a minimum of 50% of the post-secondary mortgage market, i.e. loans repackaged as MBS and sold to Wall Street and investors worldwide to fund even more affordable lending) should be able to recognize they're a recipe for financial system disaster: http://www.huduser.org/publications/pdf/gse.pdf
What went wrong was that the GSEs misrepresented trillions of dollars worth of loans in the MBS they sold to Wall Street and worldwide investors as "prime" instead of the compromised and much higher-risk loans they actually were due to HUD's Affordable Lending goals. As Government-Sponsored Enterprises, the perception was that GSE-issued MBS were guaranteed by the U.S. Government. When they started underperforming (they had a much higher than normal percentage of high-risk loans due to HUD requirements) en masse, the sh*t hit the fan.
Representative Brad Sherman nails the result of the problem, here:
Note of interest: Countrywide was the first lender to sign an Affordable Lending agreement with HUD, in 1994. Guess what happened to Countrywide? Now you know why Mozilo faced nearly no penalty for his role in the financial crisis. He and Countrywide were merely cooperating with their signed HUD agreement.
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