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Before the financial crisis, the limit on loans guaranteed by Fannie Mae and Freddie Mac was $417,000. But in 2008, when widespread mortgage defaults pushed Wall Street to the edge of collapse, Congress changed the rules so that the companies could back mortgages of up to $729,750 in high-priced areas like Santa Clara.
For the government to back mortgages for big, expensive houses may seem "kind of obnoxious," said Richard Green, a housing economist at the University of Southern California
Originally posted by Maxmars
"Too Big to Fail" is just a stage of business growth which precedes "monopoly." In America, ;monopoly' usually means a business with so many networked connections that its failure cripples a host of associated businesses. Since monopolies exist, they will use their governmental influence to ensure that any potential competitors in the volume of revenue they manage get ... "sick and die."
The quasi-governmental cancers our political duopoly has inflicted on our nation are the single largest source of corruption and 'confidence-game' type rackets ... (by the way, those always happen to be either "too big to fail" or have a legislated monopoly status (though they prefer the term "quasi-governmental) ... like the Fed, the IRS, Fannie and Freddie, the BAR, the Post Office, etc.
This final leveling-up of the loan amount cap was a sign that they were bilking the economy of its wealth before the bubble they created burst.... a lesson they learned from the e-bubble of decades gone by.
It didn't matter who the clients or consumers of the loans were... only that they could participate in originating them... because that is where the instantaneous profit (money for nothing) is highest.