Maybe This Will Clear It Up?

[TigerCoach]

The following article appeared in The New York Times on September 30th, 1999. Maybe this will give you reason NOT to vote for the party that caused this mess we're in. But, I'm sure there are a few of you who will say this is 1) made up, 2) old news, 3) or try to change the subject. LOL! Sorry for the cut & paste, but it was e-mailed to me like this.



--------------------------------------------------------------------------------

September 30, 1999

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

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.

:wtf:

[SuperBran]

interesting. the part you bolded mentioned the clinton administration. i didn't know he was running again. oh, wait......you want to generalize to ALL democrats. good job! let's see, clinton did X, so don't vote for any democrats. that's brilliant. you forgot to point out that clinton's pressure was just ONE of the factors.

i think that if you want to hold obama responsible for what the clinton administration did years ago, let's hold mccain responsible for what the bush administration has done. fair?

if you want people to give you reasons not to vote for a republican, i'm sure you'll get more than enough responses.

[CarlE]

interesting. the part you bolded mentioned the clinton administration. i didn't know he was running again. oh, wait......you want to generalize to ALL democrats. good job! let's see, clinton did X, so don't vote for any democrats. that's brilliant. you forgot to point out that clinton's pressure was just ONE of the factors.

i think that if you want to hold obama responsible for what the clinton administration did years ago, let's hold mccain responsible for what the bush administration has done. fair?

if you want people to give you reasons not to vote for a republican, i'm sure you'll get more than enough responses.

If I'm not mistaken what he's TRYING to do is just make sure that the Obamayomama train DOESN'T continue to blame McCain for it. There IS a difference.

[TigerswillbeTigers]

And there's this, which really confuses me whenever someone lays all the blame on the democratic party!
THE PRESIDENT: Thank you, all. Thanks, for coming. Well, thanks for the warm welcome. Thank you for being here today. I appreciate your attendance to this very important conference. You see, we want everybody in America to own their own home. That's what we want. This is -- an ownership society is a compassionate society. [/B]More and more people own their homes in America today. Two-thirds of all Americans own their homes, yet we have a problem here in America because few than half of the Hispanics and half the African Americans own the home. That's a homeownership gap. It's a -- it's a gap that we've got to work together to close for the good of our country, for the sake of a more hopeful future. We've got to work to knock down the barriers that have created a homeownership gap.
I set an ambitious goal. It's one that I believe we can achieve. It's a clear goal, that by the end of this decade we'll increase the number of minority homeowners by at least 5.5 million families.
Some may think that's a stretch. I don't think it is. I think it is realistic. I know we're going to have to work together to achieve it. But when we do our communities will be stronger and so will our economy. Achieving the goal is going to require some good policies out of Washington. And it's going to require a strong commitment from those of you involved in the housing industry.

I appreciate so very much the home owners who are with us today, the Arias family, newly arrived from Peru. They live in Baltimore. Thanks to the Association of Real Estate Brokers, the help of some good folks in Baltimore, they figured out how to purchase their own home. Imagine to be coming to our country without a home, with a simple dream. And now they're on stage here at this conference being one of the new home owners in the greatest land on the face of the Earth. I appreciate the Arias family coming. We've got the Horton family from Little Rock, Arkansas, here today. Actually, it's not Little Rock; it's North Little Rock, Arkansas. I was corrected. (Laughter.) I appreciate so very much these good folks coming all the way up from the South. They were helped by HUD, they were helped by Freddie Mac. Obviously, they've got a young family. And when we start talking about owning a home, a smile spread right across the face of the dad that could have lit up the entire town of Washington, D.C. (Applause.) I appreciate you all coming. Thanks for coming. He had to make sure I knew that he was educated in Texas.

Finally, Kim Berry from New York is here. She's a single mom. You're not going to believe this, but her son is 18 years old. (Laughter.) She barely looked like she was 18 to me. And being a single mom is the hardest job in America. And the idea of this fine American working hard to provide for her child, at the same time working hard to realize her dream, which is owning a home on Long Island, is really a special tribute to the character of this particular person and to the character of a lot of Americans. So we're honored to have you here, Kim, and thanks for being such a good mom and a fine American.
I told Mel Martinez I was serious about this initiative. We started talking about it and I said, well, you know, I'm the kind of fellow, I don't like to lay out a goal and don't mean it. I think it's not -- I don't think it's fair for the American people to be -- to have a President or anybody else, for that matter, lay out a goal and just kind of say it, but don't mean it. I mean it. And the good news is, Mel Martinez believes it and means it, as well.

I've got some others in my administration, as I look around. I see Rosario Marin, who's the Treasurer of the United States. Rosario used to be a mayor. Thank you for coming, Madam Mayor. (Applause.) She understands how important housing is. I see other mayors around here, and I want to thank the mayors for coming. After all, it's in your interest that this project succeed.

I know we've got some folks from the faith-based community here. Luis Cortes, from Philadelphia is here; and my friend, Kirbyjon Caldwell, from Houston, Texas.
All of us here in America should believe, and I think we do, that we should be, as I mentioned, a nation of owners. Owning something is freedom, as far as I'm concerned. It's part of a free society.

Homeownership is also an important part of our economic vitality. If -- when we meet this project, this goal, according to our Secretary of Housing and Urban Development, we will have added an additional $256 billion to the economy by encouraging 5.5 million new home owners in America; the activity -- the economic activity stimulated with the additional purchasers, the additional buyers, the additional demand will be upwards of $256 billion. And that's important because it will help people find work.

Low interest rates, low inflation are very important foundations for economic growth. The idea of encouraging new homeownership and the money that will be circulated as a result of people purchasing homes will mean people are more likely to find a job in America. This project not only is good for the soul of the country, it's good for the pocketbook of the country, as well.

To open up the doors of homeownership there are some barriers, and I want to talk about four that need to be overcome. First, down payments. A lot of folks can't make a down payment. They may be qualified. They may desire to buy a home, but they don't have the money to make a down payment. I think if you were to talk to a lot of families that are desirous to have a home, they would tell you that the down payment is the hurdle that they can't cross. And one way to address that is to have the federal government participate.
And so we've called upon Congress to set up what's called the American Dream Down Payment Fund, which will provide financial grants to local governments to help first-time home buyers who qualify to make the down payment on their home. If a down payment is a problem, there's a way we can address that. And when Congress funds the program, this should help 200,000 new families over the next five years become first-time home buyers.

Secondly, affordable housing is a problem in many neighborhoods, particularly inner-city neighborhoods. You may -- we may have qualified home buyers, but if there's no home to buy, this initiative isn't going anywhere. And so one of the things that we're going to -- that I'm doing is proposing a single-family affordable housing credit to encourage the construction of single-family homes in neighborhoods where affordable housing is scarce.

Over the next five years the initiative will provide home builders and therefore home buyers with -- home builders with $2 billion in tax credits to bring affordable homes and therefore provide an additional supply for home buyers. It's really important for us to understand that we can provide incentive for people to build homes where there's a lack of affordable housing.

And we've got to set priorities. And one of the key priorities is going to be inner-city America. Good schools and affordable housing will help revitalize our inner cities.

Another obstacle to minority homeownership is the lack of information. You know, getting into your own home can be complicated. It can be a difficult process. I had that very same problem.

Every home buyer has responsibilities and rights that need to be understood clearly. And yet, when you look at some of the contracts, there's a lot of small print. And you can imagine somebody newly arrived from Peru looking at all that print, and saying, I'm not sure I can possibly understand that. Why do I want to buy a home? There's an educational process that needs to go on, not only to explain the contract, explain obligation, but also to explain financing options, to help people understand the complexities of a homeownership market, and also at the same time to protect people from unscrupulous lenders, people who would take advantage of a good-hearted soul who is trying to realize their dream.

Homeownership education is critical. And so today, I'm pleased to announce that through Mel's office, we're going to distribute $35 million in 2003 to more than 100 national, state and local organizations that promote homeownership through buyer education. (Applause.)

And, of course, one of the larger obstacles to minority homeownership is financing, is the ability to have their dream financed. Right now, we have a program that all of you are familiar with, maybe our fellow Americans are, and that's what they call a Section 8 housing program, that provides billions of dollars in vouchers to help low-income Americans with their rent. It encourages leasing. We think it's important that we use those vouchers, that federal money to help low-income Americans go from being somebody who leases to somebody who owns; that we use the Section 8 program to not only help with down payment, but to help with continuing monthly mortgage payments after they're into their new home. It is a -- it is a way to help us meet this dream of 5.5 million additional families owning their home.
I'm also going to encourage the lending industry to develop a mortgage market so that this script, these vouchers, can regularly be used as a source of payment to provide more capital to lenders, who can then help more families move from rental housing into houses of their own.
These are some of the barriers that home owners face, potential home owners face, and this is what we intend to do about it. But like in a lot of our life, government can't do everything. It's impossible to provide every aspect of a national strategy, particularly in this case. And that's why we need the help of private and nonprofit sectors in our country to help play a vital role in helping to meet the goal. Many of you here represent the nonprofit, as well as the private sectors of our economy and our country, and I want to thank you for your commitment.

Last June, I issued a challenge to everyone involved in the housing industry to help increase the number of minority families to be home owners. And what I'm talking about, I'm talking about your bankers and your brokers and developers, as well as members of faith-based community and community programs. And the response to the home owners challenge has been very strong and very gratifying. Twenty-two public and private partners have signed up to help meet our national goal. Partners in the mortgage finance industry are encouraging homeownership by purchasing more loans made by banks to African Americans, Hispanics and other minorities.

Freddie Mae -- Fannie Mae and Freddie Mac -- I see the heads who are here; I want to thank you all for coming -- (laughter) -- have committed to provide more money for lenders. They've committed to help meet the shortage of capital available for minority home buyers.

Fannie Mae recently announced a $50 million program to develop 600 homes for the Cherokee Nation in Oklahoma. Franklin, I appreciate that commitment. They also announced $12.7 million investment in a condominium project in Harlem. It's the beginnings of a series of initiatives to help meet the goal of 5.5 million families. Franklin told me at the meeting where we kicked this office, he said, I promise you we will help, and he has, like many others in this room have done.

Freddie Mac recently began 25 initiatives around the country to dismantle barriers and create greater opportunities for homeownership. One of the programs is designed to help deserving families who have bad credit histories to qualify for homeownership loans. Freddie Mac is also working with the Department of Defense to promote construction and financing for housing for men and women in the military.
There's all kinds of ways that we can work together to meet the goal. Corporate America has a responsibility to work to make America a compassionate place. Corporate America has responded. As an example -- only one of many examples -- the good folks at Sears and Roebuck have responded by making a five-year, $100 million commitment to making homeownership and home maintenance possible for millions of Americans.

The non-profit groups are bringing homeownership to some of our most troubled communities. And as you know, I'm a strong advocate of what I call the faith-based initiative. And the reason I am is because I understand the universal call to love a neighbor like you'd like to be loved yourself, and that includes helping somebody find a home.

And the faith-based community is doing some fantastic work when it comes to encouraging homeownership, whether it be financial counseling, or job training or other outreach services, to help people understand what it takes to buy a home.

So I want to thank you all for coming. I want to thank you for your determination to help close the minority homeownership gap. It's an incredibly important initiative for this country. See, America is a good and generous country. It's a great place. Part of it was to make sure that the dream, the American Dream, the ability to come from anywhere in our society and say, I own this home, is a reality -- can be achievable for anybody, regardless of their status, regardless of their -- of whether or not they -- whether or not they think the dream is meant for them.
I mean, we can put light where there's darkness, and hope where there's despondency in this country. And part of it is working together as a nation to encourage folks to own their own home.
Again, I want to tell you, this is an initiative -- as Mel will tell you, it's an initiative that we take very seriously. We're going to stay on it until we're -- until we achieve the goal. And as we all achieve the goal, we can look back and say, America is a better place for our hard work, our efforts and our desires for our fellow Americans to realize the greatness of our country.

[SuperBran]

If I'm not mistaken what he's TRYING to do is just make sure that the Obamayomama train DOESN'T continue to blame McCain for it. There IS a difference.

what he's doing is telling people not to vote for obama b/c of what clinton did years ago. unless someone can show some connection, that is ridiculous to say.

it's one thing to point a finger at the democrats.....but to say that you shouldn't vote for a candidate b/c of what an someone else did years ago, or what a party did years ago, is absolutely ridiculous. that's like holding mccain responsible for what nixon did.

[CarlE]

what he's doing is telling people not to vote for obama b/c of what clinton did years ago. unless someone can show some connection, that is ridiculous to say.

it's one thing to point a finger at the democrats.....but to say that you shouldn't vote for a candidate b/c of what an someone else did years ago, or what a party did years ago, is absolutely ridiculous. that's like holding mccain responsible for what nixon did.

I agree. I THINK we're saying the same thing. By the way, they're BOTH idiots.

[TigerCoach]

What I'm trying to say is that we can't afford to vote for the Democratic Party reasoning of "equal wealth for every American". I don't care if it's Obama or John F. Kennedy, the parties fundamental thinking is flawed, in my opinion. Obama seems like a likeable person, I would have a few beers with him, but it's not him, it's the party.

I'm no big fan of McCain either, but the parties thinking seems to make more sense to me. I'm not necessarily voting the person as I am the party. Some of the same Congressman who put us in this hole are still in Congress. Hell, Barney Frank's partner was on the Board at Fannie Mae during all this. (I'm wondering if that's where Monica learned her skills?)

[SuperBran]

What I'm trying to say is that we can't afford to vote for the Democratic Party reasoning of "equal wealth for every American". I don't care if it's Obama or John F. Kennedy, the parties fundamental thinking is flawed, in my opinion. Obama seems like a likeable person, I would have a few beers with him, but it's not him, it's the party.

I'm no big fan of McCain either, but the parties thinking seems to make more sense to me. I'm not necessarily voting the person as I am the party. Some of the same Congressman who put us in this hole are still in Congress. Hell, Barney Frank's partner was on the Board at Fannie Mae during all this. (I'm wondering if that's where Monica learned her skills?)

that's great, but the key words are "in my opinion" and "to me." there are democrats that feel the same way about the republicans. each has the right to their opinion.

[Indiana95]

but it's not him, it's the party.



EXACTLY! I agree that we are also getting the party, along with McCain or Obama. I don't know about anyone else, but I do not want another 4 years of the freaking GOP in charge. Eight is enough! We can talk all day about the pros and cons of Obama vs. McCain, but like TC said "we also get the party".

If you loved Duyba and the last 8 years have been good for you, by all means vote for McCain (GOP). If you are not happy with the direction and current status of America, vote Obama (Progressive). It's really that simple. Forget all the talk about POW, Ayers, Lipstick.........If you want a different "party" the choice is simple.

p.s. I'm glad to see that Ohio and Florida are both now "blue" states. Join the rest of us "my friends". LOL

[EXECRATED]

OK Superbran, so lets take this years election and the name of Obama totally out of the equation. Lets not even look at this in a broad sense where we blame the Democratic party for its "equal wealth for every American". Lets instead look at this VERY specifically. You stated that Clinton's pressure was "just one of the factors". I therefore request that you explain the "other factors" that were crucial regarding the increase in subprime lending.

Thank you, and looking forward to your response.

[SuperBran]

I therefore request that you explain the "other factors" that were crucial regarding the increase in subprime lending.

Thank you, and looking forward to your response.


did you actually read the ENTIRE article, or just what was conveniently bolded?

if you read the entire artucle you'd CLEARLY see the following:

"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."

heck, even if you read the bolded part, you couldn't miss the following:

"and felt pressure from stock holders to maintain its phenomenal growth in profits."

many groups contributed to the problem by applying pressure. it's easy, though, for republicans to place all of the blame on the clinton administration.

anything else i can clear up?

again, to say that you shouldn't vote for obama based on what the clinton administration did years ago is ridiculous. not the same person. not the same administration.

[bs.gunn]

Not to beat a dead horse here. But the problem was not that Congress told them to give Mortgages to folk with lower income. It's that coupled with predatory lending, inflated incomes. I mean their were rules and those rules were broken. They were broken by these lending companies!

Bad business is bad business. Giving loans for homes that people can't afford is Bad business. Congress NEVER said that should be done. It's silly for you to keep bringing it up. We all know this the fault of many many people, agencies and BOTH parties. We also know if these companies were regulated that this probably would have been caught. Republicans are for de-regulation.

Vote often and vote democrat :2thumbsup:

[TomcatTiger]

Not to beat a dead horse here. But the problem was not that Congress told them to give Mortgages to folk with lower income. It's that coupled with predatory lending, inflated incomes. I mean their were rules and those rules were broken. They were broken by these lending companies!

Bad business is bad business. Giving loans for homes that people can't afford is Bad business. Congress NEVER said that should be done. It's silly for you to keep bringing it up. We all know this the fault of many many people, agencies and BOTH parties. We also know if these companies were regulated that this probably would have been caught. Republicans are for de-regulation.

Vote often and vote democrat :2thumbsup:

Congress did say that should be done...they were quite adamant about it. Congress mandated the procedure that lending companies were forced to operate by, thereby defining the very idea of what "predatory lending" means.

So, if Congress says to a bank "you must do A, B, C" then turns around and says "by doing A, B, C you are a terrible corporation," (shifting the blame after the fact) who then is at fault? This is exactly what happened no matter how many times you naively deny it. Get your head out of the sand.

Regulation is what caused what I've explained...but maybe we should have Congress do some more of it? You are amazing...really.

[dataintsmiff]

what he's doing is telling people not to vote for obama b/c of what clinton did years ago. unless someone can show some connection, that is ridiculous to say.

it's one thing to point a finger at the democrats.....but to say that you shouldn't vote for a candidate b/c of what an someone else did years ago, or what a party did years ago, is absolutely ridiculous. that's like holding mccain responsible for what nixon did.

You've been doing that the whole time I've been a member on this forum, so what's the difference now? Oh, I get it, because he's talking about a Dem and not a Rep this time....

[SuperBran]

You've been doing that the whole time I've been a member on this forum, so what's the difference now? Oh, I get it, because he's talking about a Dem and not a Rep this time....

i've been doing what?? telling people not to vote for someone b/c of what someone else did (and there being NO connection)? if that's what you're saying, please give me some examples b/c i'll guarantee you that i've NEVER done that. i'm not sure what the basis of your claim is, but i can assure you that you're 100% wrong. you must not read too carefully. i've criticized bush b/c he's an idiot, not b/c of what some other republican has done. i criticize mccain b/c he's too much in line with the idiot bush. NEVER have i told someone not to vote for someone just b/c of their party.

:bs:

[Indiana95]

i've been doing what?? telling people not to vote for someone b/c of what someone else did (and there being NO connection)? if that's what you're saying, please give me some examples b/c i'll guarantee you that i've NEVER done that. i'm not sure what the basis of your claim is, but i can assure you that you're 100% wrong. you must not read too carefully. i've criticized bush b/c he's an idiot, not b/c of what some other republican has done. i criticize mccain b/c he's too much in line with the idiot bush. NEVER have i told someone not to vote for someone just b/c of their party.

:bs:

Ahhh, don't pay any attention to DATA... He hasn't been here for a while. Chief Williams just ungrounded him from using the city computer to surf the net, so he's still a little testy! Now, don't go getting your undees in a bunch DATA, cause I'll tell and you'll be grounded again.:tonguewave:

[DragonTigerNemesis]

Good read:

http://www.newyorker.com/online/blogs/stevecoll/2008/10/the-rationality.html


Why There's More to Fear Than Fear Itself

The Rationality of Panic

[SuperBran]

Ahhh, don't pay any attention to DATA... He hasn't been here for a while. Chief Williams just ungrounded him from using the city computer to surf the net, so he's still a little testy! Now, don't go getting your undees in a bunch DATA, cause I'll tell and you'll be grounded again.:tonguewave:


and to think that i believed that those computers in the cop cars were for background checks. LOL.

[savage4president]

Not to beat a dead horse here. But the problem was not that Congress told them to give Mortgages to folk with lower income. It's that coupled with predatory lending, inflated incomes. I mean their were rules and those rules were broken. They were broken by these lending companies!

Bad business is bad business. Giving loans for homes that people can't afford is Bad business. Congress NEVER said that should be done. It's silly for you to keep bringing it up. We all know this the fault of many many people, agencies and BOTH parties. We also know if these companies were regulated that this probably would have been caught. Republicans are for de-regulation.

Vote often and vote democrat :2thumbsup:


Please do not leave out the fact that IDIOTS signed a CONTRACT stating that they would make PAYMENTS to the LENDER. Why are we not looking at Jim and Joe Jackass and their decision to actually accept the loan.