Wall Street didn't do this ... part 2

In a 2002 proposal delivered to Congress, Bush would allow the Federal Housing Administration to guarantee loans for the full purchase price of a home, plus any down-payment costs. As a practical matter, the FHA would guarantee mortgages as high as 103% of the value of the underlying home.  The Community Reinvestment Act passed in 1977 ordered banks to make loans to low and moderate income people. In 2005 homeownership reached its high of 69.1 percent.  Today homeownership is 67.3 percent.  Since 2005 the percentage of households headed by renters increased to 32.2 percent, from the 2002 rate of 30.9 percent.  The American Dream Downpayment Initiative, signed into law in Dec. 2003 didn't work as hoped.  The foreclosures from homeowners who used the American Dream Downpayment Initiative were nearly 45 percent.  Freddie Mac and Fannie Mae held 44 percent of the home loans using this plan. Nationally, 7.5 million homeowners now face foreclosure, another five million have zero or negative equity in their homes. The subprime loan foreclosure rate was 10.7 percent and only 57.3 percent were current with their payments.  Would-be home buyers and anyone facing foreclosure might wish the government would try to make things harder, not easier.