Posted on 02/28/2009 4:07:54 PM PST by dascallie
Fannie Mae Eases Credit To Aid Mortgage Lending
The New York Times
STEVEN A. HOLMES Published: September 30, 1999
In a move that could help increase home ownership rates among minorities and low-income consumers, Fannie Mae is easing credit requirements on loans that it will purchase from banks and other lenders.
The action will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans.
Fannie Mae has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people
''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.
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk...
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.
By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
They add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.
Home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.
The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.
(Excerpt) Read more at query.nytimes.com ...
Fannie Mae and Freddie Mac are worse than useless government programs and Obambi wants to increase the size of more government entitlements and bureaucracies which makes for only more corruption, ineptitude, incompetence and incredible waste!
NYT of all places.
Just great. Add in another layer of folks who can’t afford the house they bought... and the subsequent “rescue”.
Just what is wrong with renting? If you have bad credit, you did it, not anyone else. Live with it.
This is just friggin’ insane.
Fannie May-Freddie Mac are gov’t funded programs for transferring the Welfare Class from the inner city to your neighborhood.
The New Section 8 Program Revised.
Only thing is..the recipients defaulted and foreclosed.
Now HUD will own the homes. Second verse—worse than the first.
The Smoking Gun that puts the ‘rat party squarely at the center of this financial meltdown - and right from the presses of their very own Pravda......
A friend just sent me this link. I did not see this reposted a few days ago, but a search found it. It is worth a BTTT.
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