Contrary

Easing credit for Mortgages

 

Published: September 30, 1999 in the New York Times

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.

”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 (and current Obama advisor) . ”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.”

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March 8, 2010 - Posted by | Uncategorized

2 Comments »

  1. It was a Ponzi scheme that allowed the gov’t to give large amounts of money to both bankers and homeowners, stimulating the economy into a false expansion. It worked for many years.

    The Gov’t plan to get us out of Depression is largely based on getting the Ponzi scheme going again.

    Comment by reddog | March 8, 2010 | Reply

  2. I agree. And I also hold Bush partly accountable because he was cheerleading for more home ownership several times during his administration. It’s called pandering. But the root cause was the Community Reinvestment Act that set the ball in motion and was pushed into law by the democrats.

    Comment by cutshoot | March 8, 2010 | Reply


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