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In the mortgage business, is it wise to be a proponent of the free market? No.
As the economy boomed after World War II, the United States government entered into the housing business.
Post-War, U.S. housing policy backed home loans. When the government enters into any business, that business sector - its size, its shape, its construct, entrants into the business and business behavior overall - changes. Housing is no different.
The Servicemen's Readjustment Act of 1944 - we know this to be the GI Bill - helped Veterans transition from soldier to citizen. A gateway to the middle class for countless U.S. Veterans was homeownership. Homeownership made possible through no-down payment VA loans.
When speaking about the government’s role in housing, the Department of Housing and Urban Development comes to mind. HUD.
HUD was formed in 1965. See low down payment FHA loans. With low down payments, there will be elevated levels of home purchases. Thanks in no small part to the low down payment.
In terms of homeownership, countless Veterans - as well as those who benefit by obtaining an FHA loan - can and should acknowledge that the “free market” is not the reason they have been to benefit from homeownership. Government is the reason.
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