Skip to comments.NYT 1999: Fannie Mae Eases Credit To Aid Mortgage Lending
Posted on 09/20/2008 4:12:48 PM PDT by Jim Robinson
click here to read article
So....are you ready to concede that this is largely the fault of democrat hacks now? (grin)
On another note..this was an interesting bit in the article:
“In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.”
Wonder what the final percentage was last week when it went broke? 70-85% perhaps? Does anyone know?
I love the institutional memory of Free Republic. That’s why it’s the best political discussion site on the internet.
DFU NOTE: I think it is safe to say that Jackie Robinson did better at his “first”
FRANKLIN RAINES: First Black Head Of A Fortune 500 Corporation - Fannie Mae
Ebony, April, 2001 by Charles Whitaker
E-mail Print Link Former budget director charts new course at Fannie Mae
ON the scrupulously neat desk of his spacious D.C. office, Franklin Raines, the chairman and CEO of Fannie Mae, the nation’s 26th largest corporation, keeps a little motivational momento. It is the cover story of a national business magazine, emblazoned with a montage of the faces of several dethroned chief executives. “WHY CEOs FAIL!” is the title that screams from the page.
“I took this out and showed it to my staff the other day,” Raines says. “It’s a little reminder of the need to stay focused.”
Now one would hardly think that a man of Franklin Raines’ accomplishments and disposition needs to hold on to a doom-and-gloom magazine story to remind him to stay on task. After all, you don’t graduate from Harvard with honors, become a Rhodes scholar, have successful careers on Wall Street and in the highest reaches of government (he was director of the Office of Management and Budget OMB in the Clinton administration), then become the first Black man to head a Fortune 500 company if you are easily distracted. Yet Raines, who projects an air of supreme confidence, confesses to occasionally feeling a bit of the pressure attendant with his high-profile role in corporate America.
“Any time you’re a `first’ in one of these highly visible jobs, there’s always some pressure to make sure that you don’t do something that would create an excuse for people not to choose a second or a third or a fourth,” he says.
Then, there’s the not-so-obvious pressure of keeping one of the largest and most profitable corporations in America, if not the world, on course.
“In some respects it’s a little more difficult when you step into the leadership of an already successful company,” Raines, 52, says of his two years at the helm of Fannie Mae, the quasi-governmental, multibillion-dollar concern designed to spur home ownership in America. “It’s almost easier when you take over a failing company, because the expectations are very clear—you’re supposed to turn things around. But when the company is doing well, it’s not quite as obvious what you’re supposed to do.”
Prior to the summer of 1998, when Franklin Raines was tapped to take the top job at Fannie Mae, one of the great guessing games among the Black executive set was trying to figure out who would be the first African-American to reach the highest rung of the corporate ladder. Though Clifton Wharton, former CEO of TIAA-CREF, the world’s largest private pension fund, had paved the way for the cadre of Black executives waiting in the wings, a Black executive had yet to be named CEO of one of the nation’s largest public companies.
Names like A. Barry Rand, now chairman and CEO of Avis Rent A Car, and Lloyd Ware, former chairman and CEO of Maytag Corp., were generally bandied about. But few would have taken odds that Raines, who had served five years as vice chairman of Fannie Mae before taking over the directorship of OMB, would make the initial crack in the glass ceiling.
Not that Franklin Raines wasn’t imminently qualified to be corporate America’s Jackie Robinson. But his stellar performance as the Clinton administration’s point person on a wide range of initiatives had led some to believe that Raines’ future lay in the public sector, and not necessarily in the corporate world he left behind.
But he traded in government work for a compensation package of close to $7 million and a chance to show his corporate peers how a monumental company can be both a profit center and a model of community responsibility. In many ways, he is breaking the mold for corporate leaders.
What Raines has done since he officially assumed his post at Fannie Mae in January of 1999 is set the company on a path for growth and expansion with moves that are concurrently designed to boost the firm’s market share and increase the number of minority home buyers in the nation. Although it doesn’t actually make mortgage loans, Fannie Mae, which was founded as a government agency in 1938, plays an important role in the realm of home financing. The company, which became a private, shareholder-owned concern in 1968, buys up mortgages from lending institutions and sells them on the secondary market. It’s a hugely profitable venture (Fannie Mae has more than $600 billion in assets), which also plays a public service by helping to keep mortgage money in circulation.
Among the programs the company has launched under Raines’ leadership is its “American Dream” initiative, which has as one of its key components channeling $2 trillion into the housing finance market in an effort to increase the homeownership rates of minorities and women-headed households, as well as spur the development of affordable housing in inner cities and older suburbs.
A huge fan of technology, Raines is also steering the company down the road toward increased use of the Internet to streamline consumer access to mortgages and loan information.
At the same time, he is trumpeting Fannie Mae’s human resources. He points to the company’s diverse workforce as a model for the rest of corporate America. Of Fannie Mae’s more than 4,000 employees, 54 percent are women, including 41 percent of the company’s officers and 44 percent of its management group. Minorities make up 41 percent of the company. Twenty-two percent of the company’s officers are minorities, as well as 24 percent of its management group.
This is great article, and—like the 1999 NYT piece that Jim Robinson posted today—it’s from a lib source.
Obama wants to bail out the homeowners, but just what did they lose. No down payment, interest only payments. Heck if they weren’t living in their home they would have had to pay rent someplace else.
That’s some news that is fit to reprint.
Much of this story would make a good campaign ad.
Thanks for this, JimRob; I emailed this out to my list.
Barney Frank (D) says ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
This today is Clinton’s economy. Comin home to ROOOST!
That's not true. I recall the issue, inlcuding the term "redlining," being a front-burner political issue in the mid-80s, and I'm pretty sure it was around before that. Clinton/Cuomo may have advanced the agenda, but they certainly didn't start it.
Remember when the clintons were in our Whitehouse. Remember when they were in power, they tried every trick in the book to make the next president’s life miserable with all the tricks they left behind, the mortages, for one, not picking up binladen when the sudan offered him to president clinton. We must be watchful for a number of things begun in the clinton administration that affect any administration that will follow him and his minions. They thought they would be right back in the whitehouse, after President W Bush’s tenure was over...but it hasn’t happened, so, we’ll see what else they did to make future President’s difficult.
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory."
Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
You also said they "invented redlining," which they certainly did not. As for them "conspiring to sue....," that, too, was a natural outgrowth of an issue that had been simmering for many years prior. The old qualification rules had been decried as 'racist' long before they came into the game.
I am happy to agree that Clinton/Cuomo must shoulder a hefty share of the blame. But they were really just riding a pre-existing trend. And Clinton, in his cynical way, probably didn't 'conspire' to do anything more than try to burnish his legacy.
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