Before the Great Depression of 1929 home ownership was only had by only about two-fifths of the American population. Up until the New Deal, which included a bundle of programs to help boost the struggling economy, the overall moral of the U.S. was down. An estimated 13 million were unemployed and those that owned their homes were losing them to foreclosure. Tempers flared as laid off workers would crowd around their former job sites demanding unemployment compensation, some even lost their lives in these shuffles. Part of Roosevelts New Deal reform was the Federal National Mortgage Association or Fannie Mae. Fannie Mae was designed to provide local banks with federal money for financing home loans. The Savings and Loans began to offer lower interest rates and long-term home loans allowing the average working family to buy a home of their own. There …show more content…
Reagan’s deregulation on banks was to remove the restrictions on mortgage lending. Reagan felt that “we hit the jackpot” with his deregulation, and some people did. Spencer Blain of Empire Savings and Loans and Danny Faulkner, a high school dropout turned developer were able to pull off what is said to be the most reckless and fraudulent land investment schemes in American history. Empire would lure depositors in with their high-interest rate and then use those deposits to buy land at low prices. They would then turn around and sell that land to investors for a large profit. Along I-30 in Dallas Texas, there is still evidence of the development of condos that were not worth the amount that was paid for them. Once the scheme was realized, Faulkner and Blain were charged and sentenced for fraud along with several others at Empire. Since the deposits were still guaranteed by the government, the taxpayers footed the bill for 153 billion