Posted on 02/24/2009 1:55:02 PM PST by xcamel
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 and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. 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.
(Excerpt) Read more at query.nytimes.com ...
‘egg-zactly’
Interesting you mentioned Titanic. Had the Titanic hit the iceberg head on, it wouldn’t have sunk. Instead it sideswiped the iceberg tearing a hole all along its side, thus sealing her fate. True, the impact of a head-on collision probably would have killed some on the ship, but at least she still would have stayed afloat.
Kind of like how they are trying to address this problem. Instead of hitting it head on, and dealing with the pain, they are trying to sideswipe it with all of these bailouts and stimulus plans, which in the end will only make it more likely that we will also sink in the end.
bookmark
I cannot imagine anyone with less than stellar income and credit rating gettign a mortgage for a quarter of a million dollars. It wouldn’t take many of them defaulting to sink everything. In fact it didnt’.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.