10.2.19
This year, the U.S. government has reached a record in government-backed housing debt, with Fannie, Freddie and the FHA currently guaranteeing 33 percent more mortgage-related debt than before the housing crisis. The article notes that while officials in the aftermath of the financial crisis aimed to curb risky lending backed by the Federal Government, recent policy changes have enabled lower income borrowers with higher debt-to-income ratios to obtain mortgages. While steps have been taken to help mitigate the risks presented by these mortgages, an economic downturn or forthcoming policy changes—like the expiration of the so-called ‘QM Patch’ or efforts to privatize the GSEs—could result in disruptions to the housing market, with detrimental impacts to borrowers seeking mortgage credit.
Read more via the Washington Post.