Sub prime facts

[Truthmatters]

Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy


Federal Reserve Board data show that:
• More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.



• Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.



• Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.


Read more: http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fannie.html#ixzz1Tj8MmthM

 

[Avorysuds]

I just love LOLing at you.

 

[NYcarbineer]

Uh, just for the record, Fannie and Freddie ARE private companies. That fact seems to have been somewhat disfigured in all this mortgage talk that goes on.

And the sub-prime mortgages were issued because banks WANTED them, for the do-re-mi, as they used to say.

Pure greed.

 

[Mad Scientist]

Fannie and Freddie finance about 40 percent of all U.S. mortgages, with $5.3 trillion in outstanding debt.
How HUD Mortgage Policy Fed The Crisis

The agency neglected to examine whether borrowers could make the payments on the loans that Freddie and Fannie classified as affordable. From 2004 to 2006, the two purchased $434 billion in securities backed by subprime loans, creating a market for more such lending.

Wow, TM's wrong. How, unusual.

 

[Trajan]

Uh, just for the record, Fannie and Freddie ARE private companies. That fact seems to have been somewhat disfigured in all this mortgage talk that goes on.

And the sub-prime mortgages were issued because banks WANTED them, for the do-re-mi, as they used to say.

Pure greed.

they are government sponsored entities.....yes, your right Johnson exhibited nothing but pure greed as he drove us into a ditch.

 

[snjmom]

From 2004 to 2006, the two purchased $434 billion in securities backed by subprime loans, creating a market for more such lending.

The securities purchases were driven by FM's shareholders.

 

[Truthmatters]

where did you prove me wrong about anything?

 

[oreo]

Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy


Federal Reserve Board data show that:
• More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.



• Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.



• Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.


Read more: Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy

For God Sakes--Fannie Mae used sub-prime mortgages.

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.

Fannie Mae Eases Credit To Aid Mortgage Lending - NYTimes.com

 

[Truthmatters]

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.


Read more: Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy

 

[8537]

Fannie and Freddie finance about 40 percent of all U.S. mortgages, with $5.3 trillion in outstanding debt.
How HUD Mortgage Policy Fed The Crisis

The agency neglected to examine whether borrowers could make the payments on the loans that Freddie and Fannie classified as affordable. From 2004 to 2006, the two purchased $434 billion in securities backed by subprime loans, creating a market for more such lending.

Wow, TM's wrong. How, unusual.

Well isn't that interesting.

Tell me, how much did the private sector buy during that time? Did the GSE's market share increase or decrease?

<hint: it decreased>

 

[8537]

FM and FM only purchased conforming loans. Who bought up all the nonconforming loans?

<Hint: the answer is not a GSE>

 

[Truthmatters]

Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent

 

[8537]

Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent

Those investments banks had lots of extra cash after the Bush administration allowed them to cut their reserve ratios in half...

and poor people had lots of buying power after Bush and the Republican congress created a program to assist the poor with $5,000 towards a downpayment.

What could possible go wrong?

 

[Truthmatters]

Not a thing, as far as they were concerned it went just like planned

 

[oreo]

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.


Read more: Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy

You're going to have to pick a lane in stay in it. You just stated "previously" that Fannie Mae did not use sub-prime mortgages--NOW you're stating they did. Just to let you know--they STILL do.

 

[percysunshine]

A sub prime fact is, by definition, a fiction.

 

[oreo]

A sub prime fact is, by definition, a fiction.

Well that's as clear as mud No--sub prime mortgages have existed for many--many years. Why? I don't know--but they're insane. They always qualified the borrowers at the lowest interest rate--versus the highest rate.

The number ONE primary reason taxpayers had to bail out Fannie/Freddie was because of the use of sub-prime mortgages along with other insane deregulation of standard mortgage lending practices.

Fannie Mae Eases Credit To Aid Mortgage Lending - NYTimes.com