With no documentable income, bank accounts evidencing a history of cash flow or a FICO score, the bank is basically lending money like a loan shark. If these loans go bad, the bank is going to be on the hook entirely. If FNMA is buying these loans, Congress should be looking into firing somebody over there. And when the CA real estate market is no longer on the upward climb, these loans are going to start rotting on the vine and the banks are going to be holding billions in bad paper which will further depress the real estate market for those people who have no choice but to stay in their homes.
"But federal legislation under consideration could stymie efforts to help Latinos and other underserved minorities, said Gary Acosta, founder of the National Assn. of Hispanic Real Estate Professionals, a trade group.
Proposed changes in government-sponsored enterprises — financial-services corporations created by Congress to reduce interest rates for specific borrowers — could limit available credit for affordable mortgages and eliminate Freddie Mac- and Fannie Mae-sponsored education and financial literacy programs lenders and nonprofit groups rely on.