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Home Mortgage warning from 1999

Discussion in 'GT Voting Booth' started by myanof, Sep 30, 2008.

  1. myanof


    Dec 2, 2005
    Dallas, Texas
    New York Times story from 1999
    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....
    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.
  2. sourdough44


    Jul 23, 2007
    Long forgotten story on how we ended up here.

  3. plainsman


    Jul 25, 2005
    Giving people loans that they could only pay back if the won the lottery-was insane. Lenders were forced to offer loans so that people wouldn't feel deprived,and asked embarrassing questions, like how the hell do you expect to make the payments?

    Now we have the goverment trying for insane health care, forcing companies to insure people who are basket cases without charging them premiums that reflect the risk. guess how this will play out.......
  4. tnhawk


    Oct 25, 2009
    SW Tennessee
    The lender and borrower are both insane to have a loan without there being a reasonable chance of it being repaid. The government should try to do the things it was created to do, no more, no less than the Constitution reads.
  5. tampashooters

    tampashooters Shellback

    Jun 25, 2007
    Tampa, FL
    Wait, what? You actually have to pay that back? Silly, just silly.... I'm going to blame Bush though... Slick willie got off easy..
  6. hamster

    hamster NRA Life Member

    Feb 22, 2010
    Not sure one is better than the other. Mr. Bush grew government at a pace that would make Slick Willie Blush.
  7. Don't forget thank Congressman Dodd and Congresswoman Frank.