It’s official: no one learned anything from Fannie/Freddie collapse

The very definition of madness.

(By Ed Morrissey, Hot Air) - Here’s what should have been a familiar scenario. The federal government wants to pressure lenders into offering mortgages to marginally-qualified borrowers. They offer a method to make the loans risk-free by bundling them into mortgage-backed securities (MBS) with the imprimatur of the US Treasury as a guarantee. When the money began rolling into the lenders, the lenders started amplifying the process by issuing loans to anyone breathing on a fairly regular basis, falsifying documents in order to rake in the dough — since defaults would no longer be their problem.

Is this a good description of the CRA-based housing bubble that ran for almost a decade before catastrophically collapsing in 2008? Yes — but it’s also a description of the collapse in over a billion dollars’ worth of MBSs from a lender this week, thanks to the same geniuses that brought us the financial meltdown...