Fannie Mae eases credit to aid Mortgage Lending NYTimes Sept. 30, 1999

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http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=2

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, 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.


I guess this article in 1999 tells the story on why we're in this financial crisis today! Note that this article is exactly 9 years ago!
 
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I guess the liberals on this board aren't too interested in when this financial crisis started, ha.ha.
 
Neither is the rest of the media, although they at least left the clue. The amount of these loans was apparently staggering, and now the chickens are coming home to roost. So much for "greed from Wall Street" as the cause of the problem... more like political correctness!
 
I used to think Obama was crazy, but since he has been wearing those clear plastic suits I can see his.... nuts?.... acorns? Well you get the gist. :D


I sure see the ACORNS. In fact house Republicans saw them too. In the first bail-out bill there was pork in the "financial crisis bail-out bill" to the tune of 20 BILLION dollars going to ACORN. ACORN a group that is currently under criminal investigation for voter registration fraud. Republicans had a fit over it, & they re-did the bill with exemption to ACORN--& it still didn't pass.

However,--how curious that BO was heavily involved with ACORN during his community organizing days. Apparently he trained people in this group to go to banks & threaten them with discrimanatory practices when loaning money to lower income & minorities.

ACORN is also heavily involved with lower income housing.! Wonder if BO had anything to do with trying to slip this one under our noses?

DO DEMOCRATS EVER LEARN ANYTHING?
Like stop accomodating your base, in essense buying votes, with deals that -- we the middle class get to pay for.
 
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I sure see the ACORNS. In fact house Republicans saw them too. In the first bail-out bill there was pork in the "financial crisis bail-out bill" to the tune of 20 BILLION dollars going to ACORN. ACORN a group that is currently under criminal investigation for voter registration fraud. Republicans had a fit over it, & they re-did the bill with exemption to ACORN--& it still didn't pass.

However,--how curious that BO was heavily involved with ACORN during his community organizing days. Apparently he trained people in this group to go to banks & threaten them with discrimanatory practices when loaning money to lower income & minorities.

ACORN is also heavily involved with lower income housing.! Wonder if BO had anything to do with trying to slip this one under our noses?

DO DEMOCRATS EVER LEARN ANYTHING?

Like stop accomodating your base, in essense buying votes, with deals that -- we the middle class get to pay for.


Accounting probe to Fannie Mae and Freddie Mac. Did we bail them out? There is much more. Now we see why Spitzer had to resign as governor. Spitzer was getting into these scumbags in Wall Street. When they found out that he had a call girl, guess who went calling = the media. Of course, the media is on the side of Wall Street and are now calling for the bailout. Should we get Spitzer, The John Knight, to reign in those bastards. Maybe he should look at the dirt in Washington connected with this financial crisis.
 
I sure see the ACORNS. In fact house Republicans saw them too. In the first bail-out bill there was pork in the "financial crisis bail-out bill" to the tune of 20 BILLION dollars going to ACORN. ACORN a group that is currently under criminal investigation for voter registration fraud. Republicans had a fit over it, & they re-did the bill with exemption to ACORN--& it still didn't pass.

However,--how curious that BO was heavily involved with ACORN during his community organizing days. Apparently he trained people in this group to go to banks & threaten them with discrimanatory practices when loaning money to lower income & minorities.

ACORN is also heavily involved with lower income housing.! Wonder if BO had anything to do with trying to slip this one under our noses?

DO DEMOCRATS EVER LEARN ANYTHING?
Like stop accomodating your base, in essense buying votes, with deals that -- we the middle class get to pay for.

Sickening isn't it? Even more disgusting is the complete absense of a responsible media to tell us how this happened, wtf has been going on, and who has been paid off.

How ironic is it that our democratic presidential candidate and his ACORNS have been enjoying an unholy tryst with Fannie and Freddie .... at the tax payer's peril.
 
A few pesky facts for you rightwing nutbags.

1) Clinton was president for less than 1 and a half years after the article was written. Surely even you crazies can't claim that Bush, who was president for the next 7 years, had less to do with it than Clinton, since this problem has been going on since then, according to you.

2) So the problem is that banks were forced, by ACORN, and other groups to make loans to subprime lenders, right?...wait, that can't be true. If they are forced to make those loans, pray tell why the article states that the banks and thrifts themselves were looking for Fannie Mae to accept the new rules?

Thats all. Now back to your regularly scheduled rightwing circle jerk.
 
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.

Those damned WHITE people...obviously NOT good credit risks!

They're apparently responsible for 82% of the bad paper.
 
also, note this from the article:

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.


Is that a subprime loan? a conventional mortgage but at 1% higher than a high credit rating customer?

This has NOTHING to do with the kind of RISKY, VERY RISKY adjustable loans or loans requiring no proof or income that were created the past couple of years....

it has nothing to do with the derivitives and mortgage backed securities???
 
also, note this from the article:

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.


Is that a subprime loan? a conventional mortgage but at 1% higher than a high credit rating customer?

This has NOTHING to do with the kind of RISKY, VERY RISKY adjustable loans or loans requiring no proof or income that were created the past couple of years....

it has nothing to do with the derivitives and mortgage backed securities???

Keep pointing out the DETAILS and what happens?

the Neo_cons want to get all theoretical on you.

Why?

Because they're idealogues who believe in myths about capitalism, that's why.
 
Those damned WHITE people...obviously NOT good credit risks!

They're apparently responsible for 82% of the bad paper.

There's losers in every color, size & shape! What's that got to do with it.

Obama is out there blaming this financial crisis on the Bush adminstration who tried several attempts to reign these agencies in, only to be blocked by at least 40 democrats on the hill. McCain tried again in 2005--he was blocked. Then Obama states it's the financials & fat cats on wall street that did this.

The one thing Obama will never tell his supporters is that the government during the Clinton adminstration--is what started this financial crisis. During this time period Obama was the attorney for a group called ACORN--who is currently under criminal investigation for voter registration fraud in several states. Obama trained these people to go into banks & accuse them of discriminatory practices so they would loan out to minorities. That is a fact.

The point is--Our financial institutions are not to blame. Wall Street is not to blame. Our government is 100% guilty. The liberal agenda that everyone deserves homeownership, regardless if they can pay their mortgage or not is the root cause of the financial crisis. Now we all, including our kids & grandchildren will be paying for this huge mortgage.

This 9 year old article in the New York Times--proves it.
 
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A few pesky facts for you rightwing nutbags.

1) Clinton was president for less than 1 and a half years after the article was written. Surely even you crazies can't claim that Bush, who was president for the next 7 years, had less to do with it than Clinton, since this problem has been going on since then, according to you.

2) So the problem is that banks were forced, by ACORN, and other groups to make loans to subprime lenders, right?...wait, that can't be true. If they are forced to make those loans, pray tell why the article states that the banks and thrifts themselves were looking for Fannie Mae to accept the new rules?

Thats all. Now back to your regularly scheduled rightwing circle jerk.


I most certainly can. President Bush tried to reign in these agencies in 2003 FACT. Democrat Barney Franks is quoted as saying: There is nothing wrong with these agencies, & in fact if people within the adminstration keep saying there is, it will only deter in loaning out more money to minorities & lower income people.

McCain warned again in 2005 & was blocked by the same democrats.

Alan Greenspan warned--he was ignored.

BTW--Bill Clinton is on video & on this board for stating just last week: He along with REPUBLICANS tried to reign these agencies in & he including REPUBLICANS were blocked by DEMOCRATS.
 
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There's losers in every color, size & shape! What's that got to do with it.

Obama is out there blaming this financial crisis on the Bush adminstration who tried several attempts to reign these agencies in, only to be blocked by at least 40 democrats on the hill. McCain tried again in 2005--he was blocked.

The point is--Our financial institutions are NOT to blame. Our government IS. The liberal agenda that everyone deserves homeownership, regardless if they can pay their mortgage or not is the root cause of the financial crisis, that we all, including our kids & grandchildren will be paying for.

This story PROVES IT!

actually, president bush ENCOURAGED it....

Expanding Homeownership. The President believes that homeownership is the cornerstone of America's vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. President Bush's initiative to dismantle the barriers to homeownership includes:
American Dream Downpayment Initiative, which provides down payment assistance to approximately 40,000 low-income families;
Affordable Housing. The President has proposed the Single-Family Affordable Housing Tax Credit, which would increase the supply of affordable homes;
Helping Families Help Themselves. The President has proposed increasing support for the Self-Help Homeownership Opportunities Program; and
Simplifying Homebuying and Increasing Education. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeowners.
Fact Sheet: America's Ownership Society: Expanding Opportunities

and this

Fact Sheet: President Bush Calls for Expanding Opportunities to Homeownership
 
A few pesky facts for you rightwing nutbags.

1) Clinton was president for less than 1 and a half years after the article was written. Surely even you crazies can't claim that Bush, who was president for the next 7 years, had less to do with it than Clinton, since this problem has been going on since then, according to you.

2) So the problem is that banks were forced, by ACORN, and other groups to make loans to subprime lenders, right?...wait, that can't be true. If they are forced to make those loans, pray tell why the article states that the banks and thrifts themselves were looking for Fannie Mae to accept the new rules?

Thats all. Now back to your regularly scheduled rightwing circle jerk.

This article was posted in the New York Times--date Sept. 30, 1999. Look it up yourself--if it's just too hard on your eyes & brain! I don't know what's so hard about it to understand how people react when they're being called racist or discimanatory.

The IRS--several years ago wanted to audit Jessie Jackson's rainbow coalition. All he needed to say was they were going after him because he was black. Guess what--the IRS backed off--no audit occurred.
 
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This article was posted in the New York Times--date Sept. 30, 1999. Look it up yourself--if it's just too hard on your eyes & brain! I don't know what's so hard about it to understand how people react when they're being called racist or discimanatory.

Thats nice. It also doesn't refute my points. Care to try again?

The IRS--several years ago wanted to audit Jessie Jackson's rainbow coalition. All he needed to say was they were going after him because he was black. Guess what--the IRS backed off--no audit occurred.

Correlation does not mean causation.
 

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