NY Times in 1999 on Fannie Mae and Freddie Mac

New York Times ^ | September 30, 1999 | Steven Holmes

[Augustine22]

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…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.''…

[ken21]

>’’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.’’<

[Sir Clancelot]

Wow, this was in the New York Times? I’m shocked that Katie Couric and Charlie Gibson weren’t all over this.

[PGR88]

It played out to script.

In particular, congratulations to Peter Wallison at AEI for his prescient statements. Time to make him Secretary of the Treasury, whoever he is.....

[traviskicks]

This is a good article, but also keep in mind our current statist president was not much different:

http://www.whitehouse.gov/news/releases/2002/06/20020618-1.html

[Skooz]

bump

[Lexinom]

One more dagger... oops, can’t talk about it because the Congresional Black Caucus was one of many components in this mess — so I guess everybody is off the hook!

[I got the rope]

Yep...Bush is knee deep in this one. We shouldn’t give him a pass either. Good post.