Fannie Mae Eases Credit To Aid Mortgage Lending - New York Times »
Posted By Klarissa 9 months ago in NewsStory dated Septmebeer 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."
Very informative about what has been a part of the current mortgage problem.
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Klarissa
Berkeley conservative. Don't ask to be my friend unless you have a real bio.Eat your dessert first, life is uncertain. Bridge player, water ...
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Wolfie20079 months ago
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FTA
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"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."
So how many of them didn't pay any statistics on that?-
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tchef9 months ago
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How many of the homes purchased in that period by those people are in foreclosure? What is the percentage of the mortgages that were taken out during the Bush administration are in foreclosure?
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I bought my home in 1992 with a HUD arm loan. I had to put 5% down to get the loan. I had to show where that money came from to make sure that I hadn't borrowed it. The loans that they where writing just a 4 years ago allowed for you to borrow the down payment. Not to mention the interest only mortgages that were also sold.
This is just another attempt to deflect the blame for this situation away from those who were responsible.
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Hhussk9 months ago
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Impressive.
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I believe the overall point shows how no single person, but the overall philosophy that "home ownership is a right", is to blame.
Once we realize that we have to actually earn things, then this problem, for the most part, starts to go away.-
sonofreasonComment removed: Hard Banned
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flyonthewallzz9 months ago
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"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."
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I agree with you folks that this was not a good Idea, and recognize who was at the helm of the ship.
But this is not a NINJA loan. Or even an ARM
I think it is an oversimplification to peg the entire global financial crisis on this.-
libsRfunnyComment removed: Hard Banned
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nostalgia9 months ago
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Fly
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But isn't this how the entire house of cards started?
Both sides of the aisle bought into the "home ownership" for everyone
When loosening the lending at Fannie didn't accomplish enough, dubious entities like Countrywide stepped in. Pressuring politicians and buying politicians to turn a blind eye to the type of loans - subprime, NINJA etc - that caused the house of cards to collapse. All the while Fannie and Freddie were insuring many of these dubious loans
Activist groups like ACORN pressured banks to offer more mortgages and the Feds joined in that pressure
Wall St got involved with the bundled mortgage securites - the ratings agencies were part of the problem at this point
Banks and financial institutions worldwide bought this junk hoping to make big profits
When the housing market and foreclosures began here many financial institutions worldwide were caught up in the meltdown - many had this worthless paper
When the US began going into recession and consumers stopped buying, the descent of the rest of the world into recession had to follow -
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nostalgia9 months ago
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Obama budget plan forecasts $1.75 trillion deficit
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An eye-popping $1.75 trillion deficit for the 2009 fiscal year is projected in Obama's first budget.
The proposed $3.55 trillion spending plan for the 2010 fiscal year that begins October 1 provides the broad outlines of a more detailed one to be released in April.
http://www.reuters.com/article/businessNews/idUSTR...-
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flyonthewallzz9 months ago
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To be fair... the budget put out for 2009 was $3.1 trillion and did not include a bunch of stuff that is included in the new 2010 budget.
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I am a little fuzzy about it, but I think it did not pass and in march we will be operating without a budget.
I may have made a mistake earlier about how the stimulus package is going to be figured and I do not like it. (table s-7 page 130) shows the recovery act in a separate column.
This represents a completely new set of tricks and makes it really hard to figure out what the heck is going on.
(Table S-3 page 117) shows $247 TARP spending for 2009 but does not show the 2008 spending.
It does pretty honestly show a dramatic decline in revenue for 2009 which is a break from previous such reports. -
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sonofreasonComment removed: Hard Banned
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joe-schmo9 months ago
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"...[Fannie Mae] felt pressure from stock holders to maintain its phenomenal growth in profits.
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In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers."
Wall Street and the bankers... no ****. -
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tchef9 months ago
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This program was greatly expanded under Bush and the Republicans. The Republicans are also the ones who have gutted all our regulatory agencies resulting in little to no oversight. The Republicans had total control for the first 6 years of Bush's term. They could have done anything that they wanted. They did nothing. Yes there is blame to go around on all sides but mostly the Republicans own this.
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RedRiverJ9 months ago
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and barney frank had no fault in all this?
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http://www.justincarmony.com/blog/2008/09/30/exact... -
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Wolfie20079 months ago
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chef
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I think if you'll check it was President Bush who asked congress, at least, a dozen times to get control of sub prime lending. Even John McCain tried to get a bill introduced in the Senate to do something about the situation. Barney Frank in the House and Chis Dodd in the Senate, among other democrats, both said no, no way, no how. (There are videos of them doing it.)
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Will13139 months ago
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"Freddie Mac recently began 25 initiatives around the country to dismantle barriers and create greater opportunities for homeownership. One of the programs is designed to help deserving families who have bad credit histories to qualify for homeownership loans."
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"And part of the cornerstone of America is the ability for somebody, regardless of where they're from, regardless of where they were born, to say, this is my home; I own this home, it is my piece of property, it is my part of the American experience. "
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seems George Bush also though homeowner ship was IMPORTANT....
from 2003.. -
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Will13139 months ago
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Summary
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The American Dream Downpayment Initiative (ADDI) was signed into law on December 16, 2003. The American Dream Downpayment Assistance Act authorizes up to $200 million annually for fiscal years 2004 - 2007. ADDI will provide funds to all fifty states and to local participating jurisdictions that have a population of at least 150,000 or will receive an allocation of at least $50,000 under the ADDI formula. ADDI will be administered as a part of the HOME Investment Partnerships Program, a formula grant program.
Purpose
ADDI aims to increase the homeownership rate, especially among lower income and minority households, and to revitalize and stabilize communities. ADDI will help first-time homebuyers with the biggest hurdle to homeownership: downpayment and closing costs. The program was created to assist low-income first-time homebuyers in purchasing single-family homes by providing funds for downpayment, closing costs, and rehabilitation carried out in conjunction with the assisted home purchase.
Type of Assistance
ADDI will provide downpayment, closing costs, and rehabilitation assistance to eligible individuals. The amount of ADDI assistance provided may not exceed $10,000 or six percent of the purchase price of the home, whichever is greater. The rehabilitation must be completed within one year of the home purchase. Rehabilitation may include, but is not limited to, the reduction of lead paint hazards and the remediation of other home health hazards.
Eligible Customers
To be eligible for ADDI assistance, individuals must be first-time homebuyers interested in purchasing single family housing. A first-time homebuyer is defined as an individual and his or her spouse who have not owned a home during the three-year period prior to the purchase of a home with ADDI assistance. ADDI funds may be used to purchase one- to four- family housing, condominium unit, cooperative unit, or manufactured housing. Additionally, individuals who qualify for ADDI assistance must have incomes not exceeding 80% of area median income.
Eligible Activities
ADDI funds may be used for downpayment, closing costs and, if necessary, rehabilitation in conjunction with home purchase. ADDI funds used for rehabilitation may not exceed twenty percent of the participating jurisdiction's total ADDI allocation. The rehabilitation assisted with ADDI funds must be completed within one year of the home purchase.
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THE AMERICAN DREAM.. still in effect from HUD
http://www.hud.gov/offices/cpd/affordablehousing/p... -
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Will13139 months ago
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Seems even during Clinton's last year subprime mortgage ratios were less that 10% of the loans originated..
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the number exploded... to almost 20%
http://www.fundmasteryblog.com/wp-content/uploads/... -
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Klarissa9 months ago
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tchef, you are so right.
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An article about Washington Mutual was in the Wall Street Journal that said, (I'm paraphrasing)
This was in November 2008- that the previous May they had started to verify income statements and loan applications.
I read several times that people were walking into banks or loan agencies with someone else's pay check stub and getting a loan.
It was there for alll to see. So when did banks feel free to make loans that you or I would never think of doing. -
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stephen-johnson9 months ago
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"Very informative about what has been a part of the current mortgage problem"
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Pretty depressing, actually. With the de facto nationalization of the banks, look for future lending to be made for political rather than financial reasons. Then the ensuing failures will be blamed on the "free" market and more "regulation" will be needed.
Nothing has changed except for the occupant in the White House.
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