In 2011, the Government Mortgage Complex accounted for 88 percent of all first-mortgage originations in the United States, with the government also controlling an estimated 90 percent of the student loan market. The government’s growing dominance in the home mortgage and student loan categories is cause for concern, posing a threat to private investors, borrowers, and taxpayers.

Most people know virtually no financial history, so when we have a financial crisis, it seems like it has never happened before. But it has, again and again. As Paul Volcker, former chairman of the Federal Reserve, remarked: "About every ten years, we have the biggest crisis in 50 years." 

$25 billion in National Mortgage Settlement and other policy efforts have worked to prevent the real estate market from clearing.  At the same time, these policies have harmed those who have done the right thing.

Pollock proposes a form, "BasicFacts About Your Mortgage Loan,"be given to potential borrowers.

When the bubble deflated in 2007, an unprecedented number of weak mortgages went into default - those that were held or guaranteed by Fannie and Freddie, and those that had been securitized by Wall Street. This drove down housing prices and threw Fannie and Freddie into insolvency. 

The federal government has taken over large swaths of consumer lending, most notably the $10 trillion home mortgage and $1 trillion student lending markets. The government's share of new loans for each now approaches 100%.Government monopolies in financial services pose risks to taxpayers as well as borrowers

The 30-year fixed-rate mortgage is not the unmitigated blessing Fannie and Freddie loyalists imply. It is a big reason U.S. mortgage markets are in such bad shape.

The mortgage meltdown and ensuing financial crisis were the result of an unprecedented accumulation of weak and risky Non-Traditional Mortgages (NTMs). By mid-2008 about one-half of outstanding all loans were NTMs. The early 1990s is the appropriate benchmark since shortly thereafter government policies required the broad-based introduction of “flexible underwriting standards.”