Was the U.S. Federal Government’s 1932 Intervention in the Market for Home Ownership Desirable? How Did the Creation of Fannie Mae in 1938, Ginnie Mae in 1968, and Freddie Mac in 1970 Expand Homeownership and Shape

The mortgage crisis of 2007 marked catastrophe for millions of homeowners who suffered from foreclosure and short sales. Most of the problems involving the foreclosing of families’ homes could boil down to risky borrowing and lending. Lenders were pushed to ensure families would be eligible for a loan, when in previous years the same families would have been deemed too high-risk to obtain any kind of loan. With the increase in high-risk families obtaining loans, there was a huge increase in home buyers and subsequently a rapid increase in home prices. As a result, prices peaked and then began falling just as fast as they rose. Soon after families began to default on their mortgages forcing them either into foreclosure or short sales. Who was to blame for the risky lending and borrowing that caused the mortgage meltdown? Many might blame the company Fannie Mae and Freddie Mac, but in reality the entire system of buying and selling and free market failed home owners and the housing economy.

The America in the 1930s was drastically different from the luxurious 1920s. The stock market had crashed to an all time low, unemployment was the highest the country had ever seen, and all American citizens were affected by it in some way or another. Franklin Delano Roosevelt’s New Deal was effective in addressing the issues of The Great Depression in the sense that it provided immediate relief to US citizens by lowering unemployment, increasing trust in the banks, getting Americans out of debt, and preventing future economic crisis from taking place through reform. Despite these efforts The New Deal failed to end the depression. In order for America to get out of this economic

The effects of the Depression during the 1930’s still impact America today. The New Deal was passed to rebuild the economy after the Great Depression. William L. Niemi and David J. Plante discussed the meaning of the new deal to our economy today, “Under the New Deal regime there were more labor rights, less Supreme Court intervention in the economy, more public accountability in the structure of financial institutions driving the political economy, and a more equitable distribution of wealth”(Plante, Niemi, 413-427). Franklin Roosevelt created the New Deal, which was his plan to take America out of the Depression. He had three goals: relief, reform, and recovery. The New Deal set up policies that help us prevent future economic depressions and achieve long-term recovery. Policies that still stand and affect our economy today are the Securities and Exchange Commissions (SEC) and the Federal Deposit Insurance Corporation (FDIC). The SEC today still regulates the stock market and enforces laws that protect the industry. The SEC was used to restore the nations confidence in the economy after the Depression. The FDIC is an important part of America’s financial system. The FDIC was part of the Banking Act of 1933. The FDIC insures banks with a certain amount of money to make it a safer place to put your money in. Roosevelt

Corporate fraud is rampant, and it is becoming a part of our culture. We expect to hear about some cheating or embezzlement within the financial world. That should not be the case. However, one would think that after Tyco, Enron, WorldCom, and more recently VW, that business had learned that "cooking the books" or in the case of VW (lie to emission regulators) does not get you a gold medal in the end.

For many years, the idea that ones’ home being the largest investment was said as a complete sentence when in fact, it was only an incomplete sentence. Any duly licensed financial planner would finish that sentence by saying all investments are subject to market conditions, the value that investment could increase or decrease and other similar cautionary statements that their attorneys wrote to protect them. The American public only heard that their home was the largest investment and had never experienced, nor had their parents seen the value of their personal homes drop like they did in the past few years. They had never experienced the financial pain and although only a few years have passed, many have forgotten and are ready to jump right back into homeownership.

In 1929, the United States stock market crashed, causing the Great Depression. During the Great Depression, many Americans were starving, homeless, and struggling with unemployment issues. By the mid-1930s, unemployment had reached twenty-five percent in the United States, forcing many Americans to live and sleep in shanty towns commonly referred to as “Hoovervilles.”. Based on the letters to FDR, we can assume that many American families still faced unemployment and eviction issues. Within a letter wrote to FDR by an individual know only by the initials of C.L.F., they state, “The realtors are putting the people out when they

And the situations of businesses, labor markets and the overall system of farming was also exploited, The New Deal did not end the Depression. Nor did it significantly redistribute income. It did, however, provide Americans with economic security that they had never known before. The New Deal legacies include unemployment insurance, old age insurance, and insured bank deposits. The Wagner Act reduced violence in labor relations. The Securities and Exchange Commission protected stock market investments of millions of small investors. The Federal Housing Administration and Fannie Mae enabled most Americans to become homeowners.

The 1930s were not for a moment easy since the Great Depression, which was the utmost absolutely horrible stock-market crash the U.S. has ever dealt with. But when the government planned to start building glorious architectures, people had jobs that paid exceptionally well and could afford to own a home in “depressed” America. When President Hoover was nominated president, he tried to change the ways of the depression, by increasing tariffs so imported goods would stay away, which never helped at all (Owen). Sadly, President Hoover should have just focused on helping the people, like increasing taxes that would cause the wealthy to more, and he would give the people some money back.

At the beginning of the 1930s the era known as the “Roaring Twenties” died and from it emerged one of the hardest times known to Americans. The 1930s were centered on the Great Depression and how to alleviate the millions of Americans who were affected by it. During this era the American government, lead by FDR, attempted to reform the American economy and the lives of American people. Contrary to Hoover’s “laissez faire” economics, FDR and his administration created the New Deal to aid the US economy by government intervention. Although FDR’s New Deal did not end the Great Depression, it eased the people's suffering and reformed many issues that contributed to the depression by providing relief and reform, while changing the role of the federal government by creating lasting programs, such as social security, satisfying the needs of many citizens and increasing the

While many of these programs were wasteful, they succeeded to some extent in keeping people out of foreclosure, out of starvation, and propped up morale. I think they could have been more successful had the Administration not shot itself in the foot with a perverse economic tightening in 1937.

During the 1930’s, the United States of America was captivated by a economical, financial, and social depression as a result of the Stock Market crash in October of 1929. Many people were left with almost no money, no job, and great deal of debt. When elected in 1932, Franklin Delano Roosevelt took over the White House and implemented his “New Deal” policy that established many different legislations, administrations, and agencies in efforts to bring back American jobs, money, and prosperity.

The Federal Government needs to make sure to enforce strict guidelines on who can and cannot be accepted for a home loan, and not allow big investors to borrow excessive money at low interest rates to inflate the investor’s financial advantage. If the government starts allowing lower standards on mortgages, we are going to end up in the same catastrophe once again. In an article written by U.S. News and World Reports entitled Should the Federal Government Provide Support to the Mortgage Market?, the Federal government and the President attempted to get involved with the housing market. The passage implicated that Obama wanted to do away with federally funded conglomerates Fannie Mae and Freddie Mac and implement another type of government assisted program ("Should the Federal Government"). The program would prevent the mistakes made by Fannie and Freddie which created the original “housing bubble burst” ("Should the Federal Government"). One of the Senate bills suggests the government create “a new agency, the Federal Mortgage Insurance Corporation to replace Fannie and Freddie” ("Should the Federal

On June 27, 1934, President Franklin Roosevelt signed the National Housing Act, with the goal to improve the housing standards and conditions, as well as provide a mutual mortgage insurance system. It came at a time when at least half of the nation’s home mortgages were in default, millions of people were losing their homes, and the construction industry was halted. This law in turn created the Federal Housing Administration (FHA). The FHA set standards for construction and underwriting, and it provided mortgage issuers, such as banks and private lenders, a federal guarantee of repayment. The purpose of this was to revive mortgage lending for house construction, home improvement projects, and home purchases. Not only did the FHA’s program

Once things started to get bad, they got really bad for a lot of families who were given mortgages, who were not properly qualified. There was a major spike in defaults, with

The company’s stakeholders include primary groups of customers, employees, shareholders, owners, suppliers, etc. and secondary groups of community. All stakeholders have their own self-interests. While employees want secure jobs with high earnings; customers want quality products with cheap prices, which may eventually result in the company and employees’ low income. Being said that, the corporation owes all stakeholders the obligations to meet their interests. That brings in the ethical issue of conflicts of interest, one of key problems at Enron. CFO Andrew Fastow created financial partnership to hide Enron debt, from which he allegedly collected $30 million in management fees. The action obviously made Enron financial data look good, but at the same time deceived the company’s investors about the real performance. Many investors may make their investing decisions based on those false data. And that’s when the collapse begins.