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Author: Subject: democrats own blame for mortgage crisis

Peach Extraordinaire





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  posted on 2/24/2009 at 01:06 PM
As if the BarryO amateur hour wasn't proof enough that democrats can't run anything but their mouths now surfaces a 1999 article capably demonstrating the Clinton administration's culpability in the mortgage crisis we now face. No doubt this article will be dismissed by the resident Stalin Youth and Obama apologizers as some sort of 'ignorant hatespeech' when, in fact, the author should be lauded as a seer.

# # #

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.

[Edited on 2/24/2009 by RBK]

 

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Zen Peach



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  posted on 2/24/2009 at 01:35 PM
I dont know whats funnier, the fact that you think this proves anything or that you want to blame the Clinton administration for the past 8 years of deregulation and everything else thats contributed to this mess, not to mention the fact that we were told to get over the past 8 years already as if it never occurred. Meanwhile, you drag up Clinton while ignoring the contributions of the Republicans and their spend like crazy mentality.

 

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True Peach



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  posted on 2/24/2009 at 01:47 PM
There is certainly plenty of blame to go around. However, if Pres Clinton could effect change w/in Fannie/Freddy, the presumably so could Pres Bush, who also had the benefit of a GOP-controlled congress most of the time. By sitting idly by, Pres Bush contributed to the continuation of the liberal lending policy. What I like to call affirmation by omission.
 

Universal Peach



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  posted on 2/24/2009 at 02:25 PM
Hasn't it already been established that the "put every American in a home" mentality began with the Regan administration and was continued by EVERY administration since? Everyone is to blame from politicians, banks, appraisers, real estate agents, and of course, home buyers themselves. Did I miss anyone?
 

Zen Peach



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  posted on 2/24/2009 at 02:27 PM
http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350, 00.html

 

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Maximum Peach



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  posted on 2/24/2009 at 02:34 PM
Exactly right Chain - well said!

RBK; sometimes its downright embarrassing to think of you as a fellow conservative. Most of us aim to be a bit smarter than partisan swipes when the issue is far larger than that. Save that for when its blatently obvious. Otherwise try to help the cause by increasing knowledge instead of just tossing grenades on every issue.

Think: who was in charge of Congress in 1999?

 

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Ultimate Peach



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  posted on 2/24/2009 at 03:07 PM

 

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Ultimate Peach



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  posted on 2/24/2009 at 03:14 PM

 

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Zen Peach



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  posted on 2/24/2009 at 03:31 PM
Niether the Dems nor Clinton had anything to do with jackass taken on debt they could never afford. I've seen first hand in my market. People bought property down here sight unseen, postage stamp lots for $300-$400 thousand thinking they could flip it and make a killing. Now we have school teachers, doctors, etc. having to short sale to get out from under the loan.

Greed by everyone has killed this market by over-inflating the values.

 

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Extreme Peach



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  posted on 2/24/2009 at 04:03 PM
I have to go with dumb people making dumb decisions. Remember the TV commercials, get a $400,000 home for only $785 per month? Even after these idiots read the fine print they still signed on. I think they should now reap what they sowed back then. Nobody held a gun to their heads telling them they had to do it.

God I hate having to pay to bail out people like that, a waste of my money. I don't care who the president/congress is, it just is not right.

 

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Peach Extraordinaire



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  posted on 2/24/2009 at 04:52 PM
quote:
Exactly right Chain - well said!

RBK; sometimes its downright embarrassing to think of you as a fellow conservative. Most of us aim to be a bit smarter than partisan swipes when the issue is far larger than that. Save that for when its blatently obvious. Otherwise try to help the cause by increasing knowledge instead of just tossing grenades on every issue.



I have no desire to "aim to be a bit smarter" given the audience with which we are dealing here. I'll let you beat your head against the wall attempting high minded repartee and logic. Me, I deal with our 'best and brightest' in the terms they understand, i.e., the gutter.

As for the irrefutable facts in the article, they speak for themselves.

 

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As a patriot and a loyal member of the opposition I pledge to offer our new President the very same benefit of the doubt and unwavering support that the left offered George Bush over the last eight years.

 

True Peach



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  posted on 2/24/2009 at 04:53 PM
quote:
There is certainly plenty of blame to go around. However, if Pres Clinton could effect change w/in Fannie/Freddy, the presumably so could Pres Bush, who also had the benefit of a GOP-controlled congress most of the time. By sitting idly by, Pres Bush contributed to the continuation of the liberal lending policy. What I like to call affirmation by omission.


Which is exactly how 9/11 happened....the report sat on Condi Rice's desk from 8/11 while she had more important things to do. When Richard Clarke tried to get her to wake up and smell the coffee, she had him marginalized and then forced him out. All on W's watch.

 

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Zen Peach



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  posted on 2/24/2009 at 05:00 PM
quote:
quote:
There is certainly plenty of blame to go around. However, if Pres Clinton could effect change w/in Fannie/Freddy, the presumably so could Pres Bush, who also had the benefit of a GOP-controlled congress most of the time. By sitting idly by, Pres Bush contributed to the continuation of the liberal lending policy. What I like to call affirmation by omission.


Which is exactly how 9/11 happened....the report sat on Condi Rice's desk from 8/11 while she had more important things to do. When Richard Clarke tried to get her to wake up and smell the coffee, she had him marginalized and then forced him out. All on W's watch.


Be careful with the letter "W" soon folks will start referring to William Jefferson Clinton as W just to place blame.

 

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Peach Extraordinaire



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  posted on 2/24/2009 at 05:02 PM
quote:
By sitting idly by, Pres Bush contributed to the continuation of the liberal lending policy. What I like to call affirmation by omission.


So what Clinton did is Bush's fault too? Even BEFORE he became president he's to blame? You people DO have a derangement syndrome. Unreal.

 

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As a patriot and a loyal member of the opposition I pledge to offer our new President the very same benefit of the doubt and unwavering support that the left offered George Bush over the last eight years.

 

Ultimate Peach



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  posted on 2/24/2009 at 05:03 PM
quote:
quote:
By sitting idly by, Pres Bush contributed to the continuation of the liberal lending policy. What I like to call affirmation by omission.


So what Clinton did is Bush's fault too? Even BEFORE he became president he's to blame? You people DO have a derangement syndrome. Unreal. [/quote

 

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True Peach



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  posted on 2/24/2009 at 06:04 PM
quote:
quote:
By sitting idly by, Pres Bush contributed to the continuation of the liberal lending policy. What I like to call affirmation by omission.


So what Clinton did is Bush's fault too? Even BEFORE he became president he's to blame? You people DO have a derangement syndrome. Unreal.


Not before he became Pres, after (if I had meant before, I would have referred to him as Gov Bush, not Pres Bush). If he had the power to change the policy, and yet did nothing, then it's his policy too.

[Edited on 2/25/2009 by Brock]

 

Zen Peach



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  posted on 2/24/2009 at 06:14 PM
quote:
quote:
By sitting idly by, Pres Bush contributed to the continuation of the liberal lending policy. What I like to call affirmation by omission.


So what Clinton did is Bush's fault too? Even BEFORE he became president he's to blame? You people DO have a derangement syndrome. Unreal.


It was Reagan who appointed Greenspan, who was the main force pushing for deregulation. Saying the Market and business
would self regulate. Reagan. Bush Sr., Clinton, Dubya all signed bills for more deregulation. Plenty of blame for
both sides of the aisle. Greenspan nows says he was wrong, WHOOPS!

But this movement of deregulation started with Reagan.

And it wasn't bad loans the caused the crisis. It was Wall street selling junk based on the risky loans and insurance on
the junk with no assets to secure the insurance. This caused the collapse, not risky loans.

The Mortgage and Banking industries could have absorbed the bad loans, if not for the greed heads selling unregulated junk
on Wall street.



[Edited on 2/24/2009 by spacemonkey]

 

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True Peach



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  posted on 2/24/2009 at 07:14 PM
quote:
quote:
quote:
By sitting idly by, Pres Bush contributed to the continuation of the liberal lending policy. What I like to call affirmation by omission.


So what Clinton did is Bush's fault too? Even BEFORE he became president he's to blame? You people DO have a derangement syndrome. Unreal.



Greenspan nows says he was wrong, WHOOPS!

quote:


Kinda like McNamara saying he was wrong about Vietnam AFTER 50,000 men died-for nothing. Thanks for the apology, Bill.

quote:
It was Wall street selling junk based on the risky loans and insurance on
the junk with no assets to secure the insurance. This caused the collapse, not risky loans.

The Mortgage and Banking industries could have absorbed the bad loans, if not for the greed heads selling unregulated junk
on Wall street.




100% Correct.

 

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True Peach



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  posted on 2/24/2009 at 08:07 PM
Arby, Just like when bush/cheney were warned about WTC attack before 911 [and did nothing]. bush fiddled with himself when warned about the housing crisis. [and from you're favorite news source too!.] http://www.foxnews.com/story/0,2933,460044,00.html
 

True Peach



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  posted on 2/24/2009 at 08:29 PM
Here is a simplified but accurate explanation of the credit crisis that even arby can hopefully understand. http://vimeo.com/3261363
 

Extreme Peach



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  posted on 2/24/2009 at 08:44 PM
I have come to the conclusion that republicans are:
1) sore losers
2) that they can do no wrong (see bush,chenney)
3) everyone else is too blame
4) the biggest cry babies I have ever seen
So I suggest they all move too Iraqi,Iran North Korea, Sudan I am sure they will live fruit ful lives there.At least they will be with narrow minded like people.


 

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