[Ed. – Unfortunately, there’s a lot to this. Watchdogs have been warning for years that we have never corrected the structural flaws in federal policy that create perverse incentives for bad loans. The same vulnerabilities are still there to be abused.]
A pair of top Obama-appointed bank regulators still serving in the Trump administration could spark another mortgage meltdown by lowering credit standards and encouraging risky lending practices.
Democrat Mel Watt, who is serving a special five-year term as head of the Federal Housing Finance Agency, is pushing the mortgage-lending giants he regulates — Fannie Mae and Freddie Mac — to offer home loans to deadbeat borrowers with shaky credit, setting up conditions for another housing-market crash, industry officials warn.
Meanwhile, the other Obama holdover — liberal Democrat Richard Cordray, who continues to head the Consumer Financial Protection Bureau through 2018 — has launched an unprecedented crackdown on credit reporting bureaus for allegedly widespread errors and bias, leading the industry to strip some negative information from credit reports used by home lenders, which analysts fear could blind them to default risks.