A U.S. Treasury report warns that the U.S. government may have become the housing market by boosting spending (1.25 trillion dollars by the Federal Reserve) to lower mortgage rates. Once the money has dried up, the housing market could take a turn for the worse. The government has stepped in where the private players used to be.

Neil Barofsky, the special inspector general for the trouble asset relief program (TARP) sent the quarterly report to Congress that was released Sunday. He said banks still have incentive to take on risk because the mindset is that the government will bail us out if we get into trouble. About 90% of home loans are backed by government controlled entities like Fannie Mae and Freddie Mac. He said the two entities need to be reformed soon and loan underwriting needs to be improved.