Fannie Mae Eases Credit To Aid Mortgage Lending

FirefightnRick · September 27, 2008

New York Times......September 30, 1999.

Interesting hindsight.

Rick

FirefightnRick · September 29, 2008

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.

Hmmm, no bites. Ok I'll ask, looking back on this program, is the ending disaster of FM/FM now living proof of the failure of some of the social re-engineering in this country?

Don't bite my head off, I'm just asking a solid, legitimate question.

Rick

September 29, 2008

I didn't read anywhere in there about forcing banks to make bad loans. It is about increasing minority home ownership (which is a problem) by making financing available to qualifying borrowers. They would have 1% higher rate, INSTEAD of the old way of doing it which would make it >10% more and making ownership impossible.

It is a noble goal. It was abused by a "free market."

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers.

BANKS, Mortgage companies..

KRAM1 · September 29, 2008

John Denver...there was plenty of "abuse" to go around INCLUDING the folks who took out the mortgages they obviously could not afford in the first place! I have to assume that anyone taking out a mortgage could read, had a job and had at least a moderate amount of education. Those folks should not get a pass!

This whole mortgage "crisis" had its roots back in the Carter Admin days when the "banks" were "cahllenged" by the fed to make mortgages more affordable and open to the "masses". Nice comendable goal, I agree 100%. But, when you lower standards to make that happen...the end result over time is often just what we are seeing today. Mortgage loans for 0% down with stated income is a plan for disaster....the idea that you can put $0 real cash down, get a second for the " equity stake and do it all with a low front end adjustable rate mortgage is a disaster waiting to happen. Lots of blame to go around here...including the people who "bought" way more house then they could afford.

Let's not let anyone off the hook here....there is such a thing as personal responsibility even though there are plenty of people willing to pass the blame off on someone else. I do not recall seeing anyone hold a gun to anyone's head and force them to sign those mortgage papers. Who says you have to "buy as much house as you can afford" because homes will always go up in value? WRONG WRONG WRONG! How about everyone get back to buying the size and priced home that your personal cash flow and debt service abilituy says you can afford?

However, just let the banks go back to requiring honest income verifications, adequate down payments and adequate debt analysis and watch all the "usual suspects" start complaining that the big bad banks are locking folks out of the American Dream of home ownership!!!!!!

FirefightnRick · September 29, 2008

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans

Rick

September 30, 2008

Expanding loan (programs) doesn't mean to abuse the system with liar loans, arms and interest free loans. It spelled out a *slightly higher* interest rate and lower standards. Not what we have seen happen, which is no standards and no interest (for a period).

I am all for placing blame, but a policy to encourage home ownership, marriage and family doesn't seem like a bad policy. The free market was FREE to go crazy.

September 30, 2008

Ok Rick, you are fond of the article links... what about this: Partners in Crime

meangreendork · September 30, 2008

Rick

Research, man.

Seriously, it takes more than "relaxing credit restrictions" to cause what's happening now. It's a combination of adjusted interest rates at the FED level, the reduced restrictions you mentioned, predatory lending practices by any number of financial institutions, borrowers taking loans they didn't properly research or decide upon, corporate level greed, and the US government not stepping in fast enough. And even the government not stepping in fast enough is the fault of every member of the House, Senate, or even the Federal Reserve.

However, just let the banks go back to requiring honest income verifications, adequate down payments and adequate debt analysis and watch all the "usual suspects" start complaining that the big bad banks are locking folks out of the American Dream of home ownership!

Seriously. I think America as a whole, (myself included) needs a bit of a lesson on living within its means.

Edited September 30, 2008 by meangreendork

FirefightnRick · September 30, 2008

Ok Rick, you are fond of the article links... what about this: Partners in Crime

Elliot Spitzer? LOL!!!

In regards to who and what affects financial lendors and considering that today(yesterday) we find out that republican congressmen refused to agree on any part of the Paulson/ Dodd compromise bailout plan that promised 20% of any resulting profit from sold assets to go to the Housing Trust Fund, which would be funneled to programs such as ACORN. Here's an interesting, and very long article by NRO's Stanly Kurtz. It mentions how ACORN's tactics target to answer several concerns including “predatory lending.”

Inside Obama's ACORN.

While Acorn holds to NWRO’s radical economic framework and its confrontational 1960’s-style tactics, the targets and strategy have changed. Acorn prefers to fly under the national radar, organizing locally in liberal urban areas — where, Stern observes, local legislators and reporters are often “slow to grasp how radical Acorn’s positions really are.” Acorn’s new goals are municipal “living wage” laws targeting “big-box” stores like Wal-Mart, rolling back welfare reform, and regulating banks — efforts styled as combating “predatory lending.” Unfortunately, instead of helping workers, Acorn’s living-wage campaigns drive businesses out of the very neighborhoods where jobs are needed most. Acorn’s opposition to welfare reform only threatens to worsen the self-reinforcing cycle of urban poverty and family breakdown. Perhaps most mischievously, says Stern, Acorn uses banking regulations to pressure financial institutions into massive “donations” that it uses to finance supposedly non-partisan voter turn-out drives.

Rick

Edited September 30, 2008 by FirefightnRick

FirefightnRick · September 30, 2008

Seriously. I think America as a whole, (myself included) needs a bit of a lesson on living within its means.

I'm with ya on that.

Rick

LongJim · September 30, 2008

Seriously. I think America as a whole, (myself included) needs a bit of a lesson on living within its means.

This is exactly right. It only takes one look at television, the internet, or your mailbox to see the CREDIT!! FREE!! crap all over the place. My grandmother told me a long time ago, "You have to live within your means." I went through many years of not doing that. About 3 years ago, my wife and I decided we would look for a new house--the first house we had ever 'bought' together.

We talked to a mortgage person, and they said we could afford $xxxx per month, based on our credit, and our debt-to-income. I was incredulous, as we both had worked our debt down to almost nothing, yet the monthly outlay in expense would have been almost 3 times what I pay now for the house I'm in, and would have cut into our disposable income severely. All the calculators I looked at told me basically the same thing--I could "afford" this huge payment, when in reality, I know it would have given me ulcers having to pay it each month.

We declined, and now I'm learning to do my own repairs and upgrades on the 56 year old house I now have! :lol:

DeepGreen · October 1, 2008

Hmmm, no bites. Ok I'll ask, looking back on this program, is the ending disaster of FM/FM now living proof of the failure of some of the social re-engineering in this country?
Don't bite my head off, I'm just asking a solid, legitimate question.
Rick

I've even heard that this is one means by which the liberals are trying to make reparations to African Americans. And don't anyone bite my head off! I'm just reporting what I have read.

Edited October 1, 2008 by DeepGreen

October 2, 2008

I've even heard that this is one means by which the liberals are trying to make reparations to African Americans. And don't anyone bite my head off! I'm just reporting what I have read.

I read all kind of things, as crazy as they are... Doesn't mean I pass on gibberish simply because I read it.

DeepGreen · October 2, 2008

I read all kind of things, as crazy as they are... Doesn't mean I pass on gibberish simply because I read it.

One man's gibberish may be another man's reality and truth. Not saying....I'm just saying.

October 2, 2008

One man's gibberish may be another man's reality and truth. Not saying....I'm just saying.

If it is implied that African Americans are the ones defaulting the loans, and saving their credit scores by this bailout is some sort of 40 acres and a mule... then that *is* gibberish.

Look at the counties with the foreclosures in this area... and then look at the minority make-up.