Has the Federal Government learned anything from the Mortgage Crisis? No

Virtually no down payment? Where have we heard that before? How quickly do you think that these mortgages can go underwater? From CNBC:

. . . It's called the Affordable Advantage program, and it's being run through housing finance agencies in just four states. The program, which began near the beginning of this year, and has done a little less than $10 million in loans so far, got little press until an article last week in the New York Times.

Then today, at a hearing on GSE reform in a House Financial Services Subcommittee, the acting director of the FHFA, which is the overseer of the under-conservatorship GSE's, launched an attack on the program.

Ed DeMarco:

"This one got away from us. It was a miscommunication, and this agreement with these HFA's was signed without my knowledge. When I learned about it after the fact, I reviewed what has been done. I saw that there was a legal contract with the HFA's, and I made clear to Fannie Mae a couple of things: We are going to honor and respect that contract for its duration. It ends next March, and two, we are not doing this in the future. There were several other requests that had come into Fannie Mae from other parties for similar no down payment or very little down payment mortgages, and I said absolutely not, and so we have had nothing further on this. When this particular program with these HFA's expire, it will not be renewed."

I have to say I find it mind-boggling that in today's mortgage environment, when government is ruling the market, and when transparency and accountability are supposedly of the utmost concern, that even a small program like this one could "get away" from the folks who are supposedly protecting taxpayers from another mortgage disaster. . . .

To make matters even worse, while Fannie Mae, as early as last week, defended the program to me, citing its fixed-rate loans, high-credit borrowers and strict underwriting . . . .