Why Have All The Specialists Of The Housing Market Failed?
One of the great misconceptions concerning the foreclosure crisis, collapse of the banking industry, and resulting economic downturn continues to be that there was just too small regulation of the mortgage and financial sectors of the economy. Sadly, the precise opposite has tended to be the case, with a lot of laws, rules, and regulations that it could be pretty much humanly impossible for any organization or individual to know them well sufficient to be able to follow them.
Actually, the vast number of federal laws developed to regulate the housing market and consumer lending business have served to lull home buyers and owners into a false sense of security, instead of provide effective controls over the economy. Even though some regulations were supposed to restrict lending to people who could not manage to pay back their loans, other actions taken by legislators and regulators have directly encouraged such lending.
Thus, homeowners now facing foreclosure who put trust within the federal regulatory structure to help them save their homes may possibly discover that these agencies participated in the housing boom by encouraging artificial cost increases. Now with the collapse of the bubble and accompanying declines in home values, these very same bureaucracies are becoming given hundreds of billions of dollars to assist homeowners in solving a problem they originally helped create.
The following is a list of just a few of the federal or semi-federal organizations or regulatory bodies that had relevancy to the housing market, all of which failed to see the bubble, predict the collapse, or deal successfully with the fallout from rising foreclosure rates:
Conference of State Bank Supervisors
Federal Financial Institutions Examination Council
Federal Reserve Board and Federal Reserve System
Federal Housing Administration
Department of Housing and Urban Development
Fannie Mae
Ginnie Mae
Freddie Mac
Office of Federal Housing Enterprise Oversight
Fair Housing and Equal Opportunity Office
United States Treasury Financial Crimes Enforcement Network
Federal Trade Commission
Office of the Comptroller of the Currency
Office of Thrift Supervision
National Credit Union Administration
Department of Agriculture
Veterens Administration
Department of the Treasury
And these are only the regulators that had relevancy to the housing market. Other agencies for example the Securities and Exchange Commission had much more oversight over the financial investment firms, hedge funds, and banking giants. These had been the businesses that did so considerably to inflate the bubble and spread the risk of the collapse to overseas markets and all through the whole American economy. Semi-private businesses like the credit ratings agencies are also absent from the above list.
Could any far more regulation possibly have stopped the banks from wrecking havoc over the entire economy? There have been armies of federal bureaucrats sitting in offices all through the country who were taking taxpayer money in exchange for overseeing the housing market and financial sector of the economy. Instead of offering powerful regulation, they fostered the false sense of security a lot of homeowners and investors mistakenly bought into.
The above mentioned list also doesn’t incorporate the various state and local agencies which are spread about the country and which employ even additional bureaucrats supposedly producing positive artificial housing bubbles, predatory loans, and out of control foreclosure rates never happen in their jurisdictions. Have all of them also failed in their public service duties for which the state forcibly takes cash from the same homeowners and consumers presumably for protection?
Hundreds, if not thousands, of regulatory bodies throughout the United States had been charged with making particular that the housing bubble and collapse by no means happen. All of them have failed, regardless of the vast sums of cash they’re in a position to appropriate (or print out of thin air, within the case of the Fed). And now homeowners are expected to give these exact same agencies even additional of their money to safeguard against a lot more damage being done to the economy?
