The last couple of days have brought reminders of the housing bubble. “The Big Short” won the Academy Award for best adapted screenplay, and the Washington Post had fun digging up the history of Trump Mortgage, which opened its doors in spring 2006. “I think it’s a great time to start a mortgage company,” Trump
Many banks suffered financially as a result of falling home prices as some were heavily involved in offering risky mortgage loans.
The bursting housing bubble still has some fizz. The federal government and 49 state attorneys general recently reached a $25 billion settlement with mortgage lenders over alleged foreclosure abuses that helped contribute to the current housing crisis. Now some U.S. representatives want to make sure that the deal doesn’t produce tax problems for the folks
Here’s the question to ask, as the House and Senate negotiate a financial reform bill: Will the new law prevent another meltdown in mortgages and real estate? Probably not. Reckless lending fueled the housing bubble, and the housing bubble fueled reckless lending. The two phenomena operated in a vicious circle. To prevent another meltdown, a