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Government Displaces Private Sector as Main Home and Consumer Lender

Back in 2006, private financing supplied nearly $2 in outstanding household loans for every $1 in government-financed credit.

But 2012 completed a dramatic transformation that has seen the government displace the private sector as the main source of home mortgages and consumer credit, Federal Reserve data show.

Now, although the mortgage crisis has abated and home prices are back on the rise, the government's dominant role in consumer financing may persist.

New regulations after the financial crisis and the prospect that mortgage finance will be a cash cow for the Treasury may work against efforts to scale back the government's role.

Source: Investors Business Daily. Read full article. (link)

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