September 30, 2008

A reminder of Times past

From a 1999 article 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.

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.

Talking points from the usual suspects always point to those nasty 'ol Republicans as the end-all to be-all of the current economic crisis. The FACT is, these points are not even close to being accurate. But you won't hear that, especially from the MSM. If the MSM can't even bring themselves to note how House Speaker Nancy Pelosi couldn't even get her own House majority to vote for the bailout bill yesterday (she could only muster a measly 60%!), then forget it. The MSM is nothing but a sorry sham anymore.

Posted by Hube at September 30, 2008 04:05 PM | TrackBack

Comments  (We reserve the right to edit and/or delete any comments. If your comment is blocked or won't post, e-mail us and we'll post it for you.)

See, this is why I've been going nuts lately trying to explain to people that the problem has very little to do with the "free market" but rather with the central planning of housing.

Problem: Not enough poor people own their own homes, because they have bad credit.

Stalin: Shoot poor people until the numbers look better.

Krushchev: Reduce the requirements for credit. What could go wrong?

Posted by: G Rex at October 1, 2008 10:59 AM