England, Housing and Economic Recovery

One argument in the debate over what caused the financial crisis is that since other countries including England had housing booms; Fannie Mae, Freddie Mac and mortgages securitization weren’t the only problems.  Recent news from England may make people reconsider a bit. The Bank  of England is curtailing its “Funding for Lending”  program and reducing assistance to banks offering mortgage loans amidst worries about housing bubbles.  The background sounds a lot like here at home: home ownership has long standing and widespread political support from both liberals and conservatives dating back to the 1930s.  Moreover, these programs are popular in part because they don’t require direct government funding as long as mortgages don’t default.

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