Who is to blame for Fannie Mae and Freddie Mac?

Discussion in 'Off Topic' started by Skyliner70cc, Sep 29, 2008.

  1. Skyliner70cc

    Skyliner70cc Active Member

    2004 VIDEO http://www.dailymotion.com/video/kO4FPQvr53198rMzfe

    Video don't lie. Thank you democrats for not listening to republicans who wanted more oversight of these two organizations!

    Maxine Waters (D), praises Fannie and Freddie for meeting their "affordable housing" mission. 1/3 of defaulted mortgages in the US are to illegal aliens and other economically challenged groups who simply didn't have the means to own a home and had no "right" to qualify for a mortgage-google community reinvestment act..a vote buying scheme.

    Barney Frank, (yes, unfortunately, he's still around), said Freddie and Fannie were fiscally sound and needed no further regulation.

    Hey, don't let the facts and video get in the way of the truth. One of these days, I'll find the video I had of Democrats who supported military action against Iraq when President Clinton was in office....weapons of mass destruction was a common term used by the democratic hawks back them...how soon and easily we forget.
    Last edited: Sep 29, 2008

  2. Skyliner70cc

    Skyliner70cc Active Member

    READ THE 3RD PARAGRAPH from a 1999 New York Times Article (http://query.nytimes.com/gst/fullpa...933A0575AC0A96F958260&sec=&spon=&pagewanted=1)

    Fannie Mae Eases Credit To Aid Mortgage Lending

    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
    Last edited: Sep 29, 2008
  3. Skyliner70cc

    Skyliner70cc Active Member

    Remember, too, that John McCain tried in 2005 to enact a bill that would bring some oversight to Fannie and Freddie. Again – you're going to give me that "yeah, right" response ... but that bill was stopped cold by a Democrat solid party line vote. Again ... do your own research. But here we have Rahm Emanuel (D - IL) blaming the free market for our current problems --- completely ignoring the government role in enabling the bad mortgages and blocking reform. Funny how we don't read much about this in the mainstream media.
  4. arceeguy

    arceeguy Active Member

  5. It looks like the Democrats were misled and Fanny and Freddy should spend a long time in JAIL.
  6. Skyliner70cc

    Skyliner70cc Active Member

    Thanks for your intellectual honesty. THe dem's back then weren't misled. They used the wide power's of the Government to promote a liberal agenda of promoting home ownership for those who wouldn't otherwise qualify for a home mortgage. While noble, government interference in the lending market to promote this goal is what caused our current crisis.

    The path to **** is riddled with good intentions. Obama blaming McCain and republicans for deregulation is BOGUS. Republicans wanted more oversight and regulation for these organizations.

    I agree, the CEOs of both companies should go to jail. Mr. Franklin Raines (fannie mae) is one of them. However, he's an Obama adviser so that'll never happen because the media will never make an issue over it.

    PS One thing I can agree upon is that GWB is a lousy president. He has done irreparable damage to the conservative movement in this country. He's a RINO...republican in name only.
    Last edited: Sep 30, 2008
  7. I'll have to be brutally honest here. I don't think McCain is gonna make any changes and the Dems may have seen their error even though they may never admit it.... it sure is a good argument.... I have a headache. :grin:
  8. Skyliner70cc

    Skyliner70cc Active Member

    I agree, I don't think any politician, dem or repub will change anything. Regarding Fannie Mae and Freddie Mac, they donated heavily to both parties. When repubs were in power, they gave the majority of donations to them and vice versa.

    We need a third party candidate who truly would put the country's interest first and uphold our constitution.
  9. BoltsMissing

    BoltsMissing Active Member

    I moved it to trash cos all skil;iner is doing now is gasbagging on carpe in whiezone.
    If anyone thinks this ought to go to woodshed, then move it to woodshed, I don't have the time to mees in woodshed.
    I'll be deleting skyliners other cr@apola threads that has nothing to do with MB,
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