If you think Bush caused our economic crisis then have you read this article put out by the New York Time article?
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: September 30, 1999
In a move that could help increase home ownership rates among minorities and low-income consumers, theFannie 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 rescuesimilar 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 disc Yes we know that it was the democrats that are always for any handout program, it was their fault. They are and their followers are like immature school kids on the playground, always saying "no he did it". never owning up to anything, only misplacing the blame.
Now they want more stimulus packages, I thought they criticized the Republicans for the same thing?. Their own ignorance and lack of boundaries will be their own demise. They cannot survive without us balancing them, I am looking forward to a great fall!.
President Bush did do a great job protecting our country Bon Bon, you were right. I saw a clip of him waving, and I got tears in my eyes. I waved back at the t.v. and said goodbye, we will miss you. Our country will miss the last Godly man they will ever see in office. Boy does his face look like an angel compared to the devil they are gonna put in there.
Queentut I look forward to your questions, please be diligent, don't give up the good fight. It is you and your tenacity and service to our country that is the glue that holds us all together. It is all to convenient to put the blame for all of our countries ills on Bush. No doubt he has to carry it for many things, but not everything. The foundation for the current "crisis" was laid in the Clinton era. The deregulation started the ball rolling there. Sadly, not many people read that left wing liberal rag "The New York Times" Good info though so thanks. Goes to show, there is enough blame to spread around. Yes I had heard about this and read the Article, I would also like to correct Joe, deregulation started with the Carter Administration with the Community Reinvestment Act, this is what started and eventually ended the Savings and Loans business and cost the US citizens boat loads of money then, today's crisis is costing us more than any boat could handle and things are going to get a lot worse for our economy.
If we had have had some bipartisanship back then we could have avoided this whole mess we are in today, instead we had special interest groups that fought against the warnings instead of fighting to fix the problems.
Look at how much we have already allocated, $300 billion a few months ago to bail out Bear Stearns and others, $80 billion for AIG and now $700 billion for Fannie and Freddie, meanwhile the CEO's of these companies are still raking in their huge bonus checks each year.
I never read the New York Times, I hope they go bankrupt! All I know is that anything printed favorable to the Bush presidency, they will probably disavow. Thanks for the information, it makes me feel better knowing that there are other people out there that did not forget 9/11 and the remarkable job that our President did to keep us safe since then. God Bless the USA. Yes, the Klinton Administration really screwed us up. Just proves once again that government getting involved is worse for Americans.
Scariest sentence known to man: "I'm from the government and I'm here to help." Yes I did and tried to tell people what was happening but I was looked at as a radical that did not know what he was talking about. When I told people to read the NY Times article they either ignored me or said they did not have time. Now I am beginning to believe that even if they could read it they do not have the comprehension to understand it and these people are the ones that voted Obama into office. Pure ignorance,plain and simple. There are many warning. The stocks falling is when people finally realize it is screwed up.
It started with deregulation by Regan. Clinton get the ball rolling. Bush acknowledged there was a problem in 2003 but congress ignored him. Congress pushed the loans and the banks finished it by mortgage meltdown.
Over many many years. The New York Times was smarter than our Congress. The loans that HUD pushed are now helping to bring down the financial system.
I could go on but I'm too disgusted. |
