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Fannie Mae Eases Credit To Aid Mortgage Lending
NY Times ^ | September 30, 1999 | STEVEN A. HOLMES

Posted on 09/28/2008 10:52:21 AM PDT by jessduntno

Fannie Mae Eases Credit To Aid Mortgage Lending

By STEVEN A. HOLMES

Published: September 30, 1999

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 and felt pressure from stock holders to maintain its phenomenal growth in profits.

These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''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.''

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.

(Excerpt) Read more at query.nytimes.com ...


TOPICS: Politics/Elections
KEYWORDS:
Whjy is this not a McCain Ad? Get Fred Thompson to read it in a chair by a fireplace? Then say "WTF"?????
1 posted on 09/28/2008 10:52:22 AM PDT by jessduntno
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To: jessduntno

I guess I just don’t get it. If you don’t qualify, there is likely a real reason......like you don’t have the ability to pay the loan.


2 posted on 09/28/2008 10:58:14 AM PDT by stboz
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To: jessduntno

He may get arrested in Missouri.


3 posted on 09/28/2008 10:59:27 AM PDT by Mark was here (The earth is bipolar.)
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To: jessduntno
increasing pressure from the Clinton Administration

How many messes had this administration had to clean up from slick willy and the smartest woman on earth?
4 posted on 09/28/2008 10:59:35 AM PDT by presently no screen name
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To: stboz

Gotta be politically correct you know.


5 posted on 09/28/2008 11:00:52 AM PDT by Beowulf9
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To: stboz

It’s the ‘handout’ and ‘no accountability’ liberal mindset in play - and now we see the results.


6 posted on 09/28/2008 11:01:15 AM PDT by presently no screen name
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To: stboz

bookmark


7 posted on 09/28/2008 11:01:32 AM PDT by GOP Poet
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To: Beowulf9

What fools. Now the rest of us have to pay. Out here in Phoenix they loaned money to illegals to buy houses. Once they couldn’t keep up the payments they dumped the houses back on the market.


8 posted on 09/28/2008 11:10:09 AM PDT by Beowulf9
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To: jessduntno
In 2002 the NAACP used one of those shaky loans to “diversify” my neighborhood. They put a minority couple into a beautiful 2 story home across the street from me. Well, the succeeded in "diversifying" the neighborhood! Never before had we experienced the police constantly being called for wife-beating. The house ended up in foreclosure.
9 posted on 09/28/2008 11:10:38 AM PDT by avacado
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To: jessduntno

“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 “

Fannie Mae used to be a good, boring organization, that provided a valuable service.
Until Democrats corrupted it.


10 posted on 09/28/2008 11:52:30 AM PDT by HereInTheHeartland (Help fight the left's anointed candidate, contribute and work for McCain/Palin..)
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To: Mark was here
If Obama is going to have his Truth Squad go after anyone who 'says something untrue about him, or makes a misleading ad', shouldn't turn about be fair play? This came from FoxNews homepage: Asked during an interview on CBS' "Face the Nation" whether McCain deserved credit for bringing lawmakers together, Obama said "no."

"Here are the facts: For two weeks I was on the phone everyday with Secretary Paulson and the congressional leaders making sure that the principles that have been ultimately adopted were incorporated in the bill," Obama said. This should be easy enough to check out, but I don't believe for one minute Obama was on the phone everyday for two weeks with Sec. Paulson! I believe Obama tries to take credit for things he had nothing to do with. Didn't he tell them 'to call him if they needed him?' Apparently, they didn't need him!

11 posted on 09/28/2008 12:01:37 PM PDT by PeskyOne
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To: presently no screen name
increasing pressure from the Clinton Administration

Via The Community Reinvestment Act !

12 posted on 09/28/2008 12:11:28 PM PDT by TexasCajun
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To: TexasCajun

Clinton’s only good at conning people with his smarmy words- he’s clueless when it comes to economics. Figures don’t lie and clinton does. Now, Hillary, tell us, again, how you are the keeper of what’s in our best interest.


13 posted on 09/28/2008 2:14:17 PM PDT by presently no screen name
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To: jessduntno
Here's more information on what Clinton did to create this mess:

How A Clinton-Era Rule Rewrite Made Subprime Crisis Inevitable

14 posted on 09/28/2008 2:22:34 PM PDT by TruthWillWin
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To: jessduntno; All

I’ve been purging through 25 years of paperwork. I just came across a note I made while listening to a radio program about an article in Mother Jones from 2000.

The title is “HOME CHEAT HOME”.

First the notes I made: Cuomo, HUD...Mortgage bankers lobby....changes in 1994 to lending voted in by the democrats....realtor and lender often the same....low income limit mortgage loan $220,000.00......6 to 8 billion per year on defaults......FBI Investigating.......

And yesterday we heard the ‘FBI is investigating”...again???

http://www.motherjones.com/news/outfront/2000/07/outfrontja00.html

July/August 2000 Issue Mother Jones

[snip]Evans is among tens of thousands of low-income homeowners victimized by a scam called “flipping” that is being repeated every day in inner-city neighborhoods from Syracuse to Los Angeles. To resurrect blighted urban areas, the government sells abandoned houses to real estate investors for renovation. But some speculators simply slap on cosmetic repairs and “flip” the properties, reselling them for many times their true value. Because the FHA co-signs the loans, it gets stuck with the bill when homeowners can’t pay the inflated mortgages. Last year the agency spent $6.5 billion to bail out 78,890 home loans that went bad-up 30 percent in three years. The foreclosed homes are seized, boarded up, and put back on the market, and the cycle starts all over again.

“We have found flipping scams in every city we’ve investigated,” says an official with the Department of Housing and Urban Development, which recently indicted 41 Realtors, lenders, and appraisers in California. “What has me shaking is that we have these kinds of numbers on defaults and we are in a bull market.”

Federal investigators call flipping more lucrative than bank robbery — but it was mortgage bankers who lobbied to make the scheme possible. Historically, the FHA assigned independent appraisers to inspect houses and set a fair value. But lenders wanted to select their own appraisers. They claimed it would streamline the process. But it would also make it easier to find someone who would ignore shoddy repairs and approve jacked-up prices.

The industry certainly had plenty of clout on Capitol Hill. From 1991 to 1994, lenders handed out $2.3 million in campaign contributions, and the investment paid off. At a meeting of the Mortgage Bankers Association in 1993, the FHA unveiled a “lender select” policy allowing bankers to choose appraisers. The news was greeted by a standing ovation.

Because the FHA supports low-income home buyers with shaky credit, defaults on agency loans have always been above the industry average. But since lenders have been allowed to handpick their own appraisers, investigators say, foreclosures have skyrocketed.”


15 posted on 09/28/2008 2:28:00 PM PDT by AuntB ( "During times of universal deceit, telling the truth becomes a revolutionary act." - George Orwell)
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