Obama, Fannie Mae, and the US Financial Crisis

[VeraDeMilo]

Let's see how long this makes it before being removed...

Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES

Published: September 30, 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.

''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.''

Demographic information on these borrowers is sketchy. But at least one study
indicates that 18 percent of the loans in the subprime market went to black
borrowers, compared to 5 per cent of loans in the conventional loan 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.

''From the perspective of many people, including me, this is another thrift
industry growing up around us,'' said Peter Wallison a resident fellow at the
American Enterprise Institute. ''If they fail, the government will have to step up
and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with
an interest rate one percentage point above that of a conventional, 30-year fixed
rate mortgage of less than $240,000 -- a rate that currently averages about 7.76
per cent. If the borrower makes his or her monthly payments on time for two years,
the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend
money directly to consumers. Instead, it purchases loans that banks make on what
is called the secondary market. 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.

Fannie Mae officials stress that the new mortgages will be extended to all
potential borrowers who can qualify for a mortgage. But 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 has, in fact, exploded among minorities during the economic boom of
the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2
per cent from 1993 to 1998, according to Harvard University 's Joint Center
for Housing Studies. During that same period the number of African Americans who
got mortgages to buy a home increased by 71.9 per cent and the number of Asian
Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes
increased by 31.2 per cent.

Despite these gains, 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.

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.

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."




Now here are a few interesting facts about the democrats and Obama:

- Five years ago, Republicans proposed "the most significant regulatory overhaul in the housing finance industry [in a decade]." -New York Times

- Democrats blocked all efforts at fixing Fannie and Freddie. Barney Frank (D-MA) said, "Fannie and Freddie aren't facing any kind of financial crisis."

- At least 18 times since the 2001 Democrats blocked efforts at overhauling Fannie and Freddie even as accounting scandals and rip-offs became public.

- Why? For starters, the top two recipients of Fannie and Freddie campaign donations were democrats Chris Dodd ($165k) and Barack Obama ($126k).

- Fannie Mae paid well. Clinton-era Democrats paid themselves $200 million in only 6 years even while a $10 BILLION accounting scandal was exposed.

- Democrats like Dodd also got favorable loans under a "VIP program." Dodd alone saved over $75k on his mortgage payments.

- So where are former Fannie Mae CEOs Raines ($90 million salary) and Johnson ($21 million salary)?
They were hired by Barack Obama and are serving as Obama's key economic advisors!

[spywizard]

i guess posting it in the news forum would have been a better choice..

[spywizard]

16 minutes looks like

and only 5 views..

[Carlos_E]

Let's see how long this makes it before being removed...

Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES

Published: September 30, 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.

''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.''

Demographic information on these borrowers is sketchy. But at least one study
indicates that 18 percent of the loans in the subprime market went to black
borrowers, compared to 5 per cent of loans in the conventional loan 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.

''From the perspective of many people, including me, this is another thrift
industry growing up around us,'' said Peter Wallison a resident fellow at the
American Enterprise Institute. ''If they fail, the government will have to step up
and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with
an interest rate one percentage point above that of a conventional, 30-year fixed
rate mortgage of less than $240,000 -- a rate that currently averages about 7.76
per cent. If the borrower makes his or her monthly payments on time for two years,
the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend
money directly to consumers. Instead, it purchases loans that banks make on what
is called the secondary market. 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.

Fannie Mae officials stress that the new mortgages will be extended to all
potential borrowers who can qualify for a mortgage. But 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 has, in fact, exploded among minorities during the economic boom of
the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2
per cent from 1993 to 1998, according to Harvard University 's Joint Center
for Housing Studies. During that same period the number of African Americans who
got mortgages to buy a home increased by 71.9 per cent and the number of Asian
Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes
increased by 31.2 per cent.

Despite these gains, 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.

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.

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."




Now here are a few interesting facts about the democrats and Obama:

- Five years ago, Republicans proposed "the most significant regulatory overhaul in the housing finance industry [in a decade]." -New York Times

- Democrats blocked all efforts at fixing Fannie and Freddie. Barney Frank (D-MA) said, "Fannie and Freddie aren't facing any kind of financial crisis."

- At least 18 times since the 2001 Democrats blocked efforts at overhauling Fannie and Freddie even as accounting scandals and rip-offs became public.

- Why? For starters, the top two recipients of Fannie and Freddie campaign donations were democrats Chris Dodd ($165k) and Barack Obama ($126k).

- Fannie Mae paid well. Clinton-era Democrats paid themselves $200 million in only 6 years even while a $10 BILLION accounting scandal was exposed.

- Democrats like Dodd also got favorable loans under a "VIP program." Dodd alone saved over $75k on his mortgage payments.

- So where are former Fannie Mae CEOs Raines ($90 million salary) and Johnson ($21 million salary)?
They were hired by Barack Obama and are serving as Obama's key economic advisors!

Again you're posting lies. Obama received campaign contributions from employees of those companies. Not from the company. And the two mentioned ARE NOT his economic advisors. This is shit made up by McCain. Factcheck.org and other news organizations did a check and it's not true.

If you're going to posts facts, post real ones. Not propaganda.



2008 Campaign Contributions from Fannie & Freddie
John McCain- $169,000
Barack Obama- $16,000