4 ways the next housing financial crisis is taking shape

The safety of the housing finance system is being imperiled as we speak.
1) There have been mortgage pricing changes that decrease fees for borrowers with low credit scores and penalize people with high credit scores.
2) The Federal Housing Finance Agency already distorts the riskiness of loans it originates to shuffle $6 billion from high quality borrowers to low quality borrowers. Ultimately, the take payer finances this wealth distribution program. The 2008 crisis partly occurred because many low-quality borrowers were seriously behind on their mortgages as the housing prices crashed. The run up to 2008 was an effort to expand credit to minority borrowers.
3) There are efforts to end the practice of foreclosure although. In a system without foreclosure, it is impossible for a borrower to default, and they magically become credit safe and worthy. There are plans to allow payment deferral to all borrowers with eligible hardships. Eligible hardships is not defined so it can mean just about anything.
4) There are efforts to eliminate the use of credit scores which are predicative of default risk.
A mortgage finance system without the threat of foreclosure or proper underwriting is an entitlement program. Entitlement programs rarely disappear, and only grow more burdensome to the taxpayer over time.
Works Cited:
https://www.wsj.com/articles/biden-courts-another-mortgage-crisis-federal-housing-finance-agency-mortgage-loans-risk-2008-homeownership-fe752269?mod=hp_opin_pos_2#cxrecs_s
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