Will there be another mortgage meltdown, triggering a housing meltdown at the heart of a nationwide economic disaster? The U.S. government, pressured by special interests (not their citizens’ interests, you can be pretty sure of that!), is relaxing regulations designed to prevent a repeat of a subprime mortgage1 bubble-burst like the one in 2008. It eventually triggered national economic depressions not just in America, but in several other countries as well.
Who will be the losers in the next meltdown?
One group to again be further impoverished are American Dreamers betting their bottom dollar on home ownership they couldn’t afford were it not for a sub-prime type mortgage.
And while we’re talking about ‘again,’ let’s not forget the nation’s renters, who discovered in the months and years following the 2008 meltdown that rents soared. That’s because homeowner evictees were busy scanning the want ads for affordable housing to substitute for their failed dream homes. The result: a market flooded with new renters, making rental units scarce and driving up rents.
The nation’s renters will be losers again. But at least the rest of America’s citizens won’t be losers, will they?
Not unless they’re taxpayers. Taxpayers will be losers when the federal government (as it did last time) spends billions on fixing the broken housing market.
And the winners will be?
From the last experience little more than ten years ago, winners will be financial market speculators who are savvy enough to sell just before the meltdown happens. And in later months and years, let’s not forget those ‘too big to lose’ financial institution winners. That’s when cronies in government decide those institutions merit bailouts from their multi-billion dollar losses by using taxpayer dollars.
Read more in The Bulletin: U.S. Taxpayers Exposed To Risky Mortgages, And It’s Gotten Worse
And if you’d like to really get to the nitty-gritty of the issue, read more in Investopedia: The Risk Of Subprime Mortgages By A New Name
