Activism Discussion: How The Mortgage Meltdown Started (what The Omabatrons Won't Tell You...)

How The Mortgage Meltdown Started (what The Omabatrons Won't Tell You...)
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Stan De SD
2009-03-01 05:18:27 EST
(note the date, and the administration pushing these policies at the
time...)

Fannie Mae Eases Credit To Aid Mortgage Lending
Published: September 30, 1999

In a move that could help increase home ownership rates among
minorities and low-income consumers, the Fannie Mae Corporation is
easing the credit requirements on loans that it will purchase from
banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in
15 markets -- including the New York metropolitan region -- will
encourage those banks to extend home mortgages to individuals whose
credit is generally not good enough to qualify for conventional loans.
Fannie Mae officials say they hope to make it a nationwide program by
next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has
been under increasing pressure from the Clinton Administration to
expand mortgage loans among low and moderate income people and felt
pressure from stock holders to maintain its phenomenal growth in
profits.

In addition, banks, thrift institutions and mortgage companies have
been pressing Fannie Mae to help them make more loans to so-called
subprime borrowers. These borrowers whose incomes, credit ratings and
savings are not good enough to qualify for conventional loans, can
only get loans from finance companies that charge much higher interest
rates -- anywhere from three to four percentage points higher than
conventional loans.

''Fannie Mae has expanded home ownership for millions of families in
the 1990's by reducing down payment requirements,'' said Franklin D.
Raines, Fannie Mae's chairman and chief executive officer. ''Yet there
remain too many borrowers whose credit is just a notch below what our
underwriting has required who have been relegated to paying
significantly higher mortgage rates in the so-called subprime
market.''

Demographic information on these borrowers is sketchy. But at least
one study indicates that 18 percent of the loans in the subprime
market went to black borrowers, compared to 5 per cent of loans in the
conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae
is taking on significantly more risk, which may not pose any
difficulties during flush economic times. But the government-
subsidized corporation may run into trouble in an economic downturn,
prompting a government rescue similar to that of the savings and loan
industry in the 1980's.

''From the perspective of many people, including me, this is another
thrift industry growing up around us,'' said Peter Wallison a resident
fellow at the American Enterprise Institute. ''If they fail, the
government will have to step up and bail them out the way it stepped
up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a
mortgage with an interest rate one percentage point above that of a
conventional, 30-year fixed rate mortgage of less than $240,000 -- a
rate that currently averages about 7.76 per cent. If the borrower
makes his or her monthly payments on time for two years, the one
percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does
not lend money directly to consumers. Instead, it purchases loans that
banks make on what is called the secondary market. By expanding the
type of loans that it will buy, Fannie Mae is hoping to spur banks to
make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to
all potential borrowers who can qualify for a mortgage. But they add
that the move is intended in part to increase the number of minority
and low income home owners who tend to have worse credit ratings than
non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the
economic boom of the 1990's. The number of mortgages extended to
Hispanic applicants jumped by 87.2 per cent from 1993 to 1998,
according to Harvard University's Joint Center for Housing Studies.
During that same period the number of African Americans who got
mortgages to buy a home increased by 71.9 per cent and the number of
Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for
homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to
lag behind non-Hispanic whites, in part because blacks and Hispanics
in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that
by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's
portfolio be made up of loans to low and moderate-income borrowers.
Last year, 44 percent of the loans Fannie Mae purchased were from
these groups.

The change in policy also comes at the same time that HUD is
investigating allegations of racial discrimination in the automated
underwriting systems used by Fannie Mae and Freddie Mac to determine
the credit-worthiness of credit applicants.

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260

C*@gmail.com
2009-03-01 08:45:08 EST
On Mar 1, 4:18 am, Stan de SD <StanD...@gmail.com> wrote:
> (note the date, and the administration pushing these policies at the
> time...)
>
> Fannie Mae Eases Credit To Aid Mortgage Lending
> Published: September 30, 1999

The Obamatrons don't /need/ to tell us what we already know.

Pandering has gotten them the House, Senate and the Executive Mansion.
Even when, as in last November, the panderers were registering 20% and
less approvals.

We the People get the government we deserve.

--
Neolibertarian

Tim Howard
2009-03-01 14:45:12 EST
Stan de SD wrote:
> (note the date, and the administration pushing these policies at the
> time...)
>
> Fannie Mae Eases Credit To Aid Mortgage Lending
> Published: September 30, 1999
>
> In a move that could help increase home ownership rates among
> minorities and low-income consumers, the Fannie Mae Corporation is
> easing the credit requirements on loans that it will purchase from
> banks and other lenders.

Of course Bush could have tried to stop it if he thought it was so bad.

But you are right Stan. Both Democrats and Republicans are to blame for
this mortgage mess. Both sides are in the pockets of the banks and
other corporate capitalists. Those guys have made out fine and the rest
of us have to pay the price. Glad we finally agree on something.

TheJoe
2009-03-01 14:49:57 EST
Tim Howard wrote:
> Stan de SD wrote:
>> (note the date, and the administration pushing these policies at the
>> time...)
>>
>> Fannie Mae Eases Credit To Aid Mortgage Lending
>> Published: September 30, 1999
>>
>> In a move that could help increase home ownership rates among
>> minorities and low-income consumers, the Fannie Mae Corporation is
>> easing the credit requirements on loans that it will purchase from
>> banks and other lenders.
>
> Of course Bush could have tried to stop it if he thought it was so bad.

TRIED AND WAS CALLED A RACIST.. SO NOW U DUMS GOT WHAT U WANTED.


Stan De SD
2009-03-01 14:50:03 EST
On Mar 1, 11:45 am, Tim Howard <tim.how...@suddenlink.net> wrote:
> Stan de SD wrote:
> > (note the date, and the administration pushing these policies at the
> > time...)
>
> > Fannie Mae Eases Credit To Aid Mortgage Lending
> > Published: September 30, 1999
>
> > In a move that could help increase home ownership rates among
> > minorities and low-income consumers, the Fannie Mae Corporation is
> > easing the credit requirements on loans that it will purchase from
> > banks and other lenders.
>
> Of course Bush could have tried to stop it if he thought it was so bad.
>
> But you are right Stan.  Both Democrats and Republicans are to blame for
> this mortgage mess.  Both sides are in the pockets of the banks and
> other corporate capitalists.  

You apparently missed the part about the government pushing to loan
money to people who couldn't pay it back. If you think that's
"capitalism", you're more clueless than I thought.

TheJoe
2009-03-01 14:50:32 EST
Stan de SD wrote:
> On Mar 1, 11:45 am, Tim Howard <tim.how...@suddenlink.net> wrote:
>> Stan de SD wrote:
>>> (note the date, and the administration pushing these policies at the
>>> time...)
>>> Fannie Mae Eases Credit To Aid Mortgage Lending
>>> Published: September 30, 1999
>>> In a move that could help increase home ownership rates among
>>> minorities and low-income consumers, the Fannie Mae Corporation is
>>> easing the credit requirements on loans that it will purchase from
>>> banks and other lenders.
>> Of course Bush could have tried to stop it if he thought it was so bad.
>>
>> But you are right Stan. Both Democrats and Republicans are to blame for
>> this mortgage mess. Both sides are in the pockets of the banks and
>> other corporate capitalists.
>
> You apparently missed the part about the government pushing to loan
> money to people who couldn't pay it back. If you think that's
> "capitalism", you're more clueless than I thought.
TYPICAL OBAMORONS

Tim Howard
2009-03-01 15:52:11 EST
Stan de SD wrote:
> On Mar 1, 11:45 am, Tim Howard <tim.how...@suddenlink.net> wrote:
>> Stan de SD wrote:
>>> (note the date, and the administration pushing these policies at the
>>> time...)
>>> Fannie Mae Eases Credit To Aid Mortgage Lending
>>> Published: September 30, 1999
>>> In a move that could help increase home ownership rates among
>>> minorities and low-income consumers, the Fannie Mae Corporation is
>>> easing the credit requirements on loans that it will purchase from
>>> banks and other lenders.
>> Of course Bush could have tried to stop it if he thought it was so bad.
>>
>> But you are right Stan. Both Democrats and Republicans are to blame for
>> this mortgage mess. Both sides are in the pockets of the banks and
>> other corporate capitalists.
>
> You apparently missed the part about the government pushing to loan
> money to people who couldn't pay it back. If you think that's
> "capitalism", you're more clueless than I thought.
They didn't make those sub-prime loans because they cared about all
those people who could not afford the homes they bought. They did it to
help the bankers and financiers.

Democracy Highlander
2009-03-01 16:47:47 EST
On Mar 1, 5:18 am, Stan de SD <StanD...@gmail.com> wrote:
> In a move that could help increase home ownership rates among
> minorities and low-income consumers, the Fannie Mae Corporation is
> easing the credit requirements on loans that it will purchase from
> banks and other lenders.

So government forced Fannie and Freddie to do something while
everybody else has been free to act based on the market rules.
Therefore libertarians will be fast to point out that the ONLY banks
having problems are Fannie and Freddie the government meddle with,
while AIG, Lehman Brothers, Bear Stern, WaMu, Citi, BoA, Countrywide,
Merrill Lynch etc etc etc are stro9ng as a stone. Not being forced by
government to do anything none of them had any issue, they are sound
and prosperous while all the crisis is limited to Fannie and Freddie.

Well, the reality tend to laugh in the face of this idiotic
libertarian belief. As mater of fact, the abuses in subprime loans was
a pure greedy free market phenomena. The same as the NINJA loans
practice which steamed exclusively from private practice in direct
disregard of government guidelines.

MOTTO: Think, because thinking is the best conservative repellent.

Stan De SD
2009-03-01 16:47:56 EST
On Mar 1, 12:52 pm, Tim Howard <tim.how...@suddenlink.net> wrote:
> Stan de SD wrote:
> > On Mar 1, 11:45 am, Tim Howard <tim.how...@suddenlink.net> wrote:
> >> Stan de SD wrote:
> >>> (note the date, and the administration pushing these policies at the
> >>> time...)
> >>> Fannie Mae Eases Credit To Aid Mortgage Lending
> >>> Published: September 30, 1999
> >>> In a move that could help increase home ownership rates among
> >>> minorities and low-income consumers, the Fannie Mae Corporation is
> >>> easing the credit requirements on loans that it will purchase from
> >>> banks and other lenders.
> >> Of course Bush could have tried to stop it if he thought it was so bad.
>
> >> But you are right Stan.  Both Democrats and Republicans are to blame for
> >> this mortgage mess.  Both sides are in the pockets of the banks and
> >> other corporate capitalists.  
>
> > You apparently missed the part about the government pushing to loan
> > money to people who couldn't pay it back. If you think that's
> > "capitalism", you're more clueless than I thought.
>
> They didn't make those sub-prime loans because they cared about all
> those people who could not afford the homes they bought.  They did it to
> help the bankers and financiers.

You can't seem to accept that lefty Democrats like Barney Frank and
Chris Dodd (who were well rewarded with later campaign contributions
from Fannie Mae, as well as a certain Barack Hussein Obama) put a lot
of pressure on the banks to loan money to people who in their minds
were victims of "discrimination". They used a carrot-and-stick
approach, empowering Fannie Mae to buy up risky loans from these same
banks, with the implication that they were some type of quasi-
governmental agency, and that the US Treasury (in reality, the
taxpayers) guarantee the loans - the same sort of risky behavior noted
in the NYT ad. Like any good doctrinaire lefty liberal, you're quick
to blame this on some type of evil conspiracy by the banks, without
even having the honesty to consider how your beloved Democrats made
the mess in the first place. Now, if you ran a bank during the Clinton
Administration, and politicians were telling you on one hand "You have
to make more loans to these people, or we will accuse you of being
discriminatory and push to pass sanctions against your bank", but on
the other hand "Don't worry. Fannie Mae will buy up your bad loans and
you won't be at risk", what are you going to do? Lefties have this bad
habit of creating incentives for certain behavior, then seeking to
punish those whose behavior was influenced by those "same
incentives"... :O|

TheJoe
2009-03-01 17:00:14 EST
Stan de SD wrote:
> On Mar 1, 12:52 pm, Tim Howard <tim.how...@suddenlink.net> wrote:
>> Stan de SD wrote:
>>> On Mar 1, 11:45 am, Tim Howard <tim.how...@suddenlink.net> wrote:
>>>> Stan de SD wrote:
>>>>> (note the date, and the administration pushing these policies at the
>>>>> time...)
>>>>> Fannie Mae Eases Credit To Aid Mortgage Lending
>>>>> Published: September 30, 1999
>>>>> In a move that could help increase home ownership rates among
>>>>> minorities and low-income consumers, the Fannie Mae Corporation is
>>>>> easing the credit requirements on loans that it will purchase from
>>>>> banks and other lenders.
>>>> Of course Bush could have tried to stop it if he thought it was so bad.
>>>> But you are right Stan. Both Democrats and Republicans are to blame for
>>>> this mortgage mess. Both sides are in the pockets of the banks and
>>>> other corporate capitalists.
>>> You apparently missed the part about the government pushing to loan
>>> money to people who couldn't pay it back. If you think that's
>>> "capitalism", you're more clueless than I thought.
>> They didn't make those sub-prime loans because they cared about all
>> those people who could not afford the homes they bought. They did it to
>> help the bankers and financiers.
>
> You can't seem to accept that lefty Democrats like Barney Frank and
> Chris Dodd (who were well rewarded with later campaign contributions
> from Fannie Mae, as well as a certain Barack Hussein Obama) put a lot
> of pressure on the banks to loan money to people who in their minds
> were victims of "discrimination". They used a carrot-and-stick
> approach, empowering Fannie Mae to buy up risky loans from these same
> banks, with the implication that they were some type of quasi-
> governmental agency, and that the US Treasury (in reality, the
> taxpayers) guarantee the loans - the same sort of risky behavior noted
> in the NYT ad. Like any good doctrinaire lefty liberal, you're quick
> to blame this on some type of evil conspiracy by the banks, without
> even having the honesty to consider how your beloved Democrats made
> the mess in the first place. Now, if you ran a bank during the Clinton
> Administration, and politicians were telling you on one hand "You have
> to make more loans to these people, or we will accuse you of being
> discriminatory and push to pass sanctions against your bank", but on
> the other hand "Don't worry. Fannie Mae will buy up your bad loans and
> you won't be at risk", what are you going to do? Lefties have this bad
> habit of creating incentives for certain behavior, then seeking to
> punish those whose behavior was influenced by those "same
> incentives"... :O|

THAT IS BECAUSE THEY CAN'T SEE PAST THEIR NOSES TO THE RESULTS OF THEIR
EXPERIMENTS.
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