CLINTON FINANCIAL CRISIS <<>>

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——– Original Message ——–
Subject:     Re: CLINTON FINANCIAL CRISIS <<< Affirmative
Action is
Bankrupt >>>
Date:     Fri, 26 Sep 2008 23:36:00 -0400
From:     *Poetic Justice*
<@http://Poetic-Justice.Talk-n-Dog.com>
Organization:     D.O.G.i – Pedia ©
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Rich Billionaire wrote:
> On Fri, 26 Sep 2008 18:28:49

-0700 (PDT), JakTheHammer

> <jakthhmmr @&*$?%aol.com> wrote:

>

>> “LAUER: There’s an article in The New York Times in

September of 1999,

>> so, during your administration, that says that your

administration

>> pressured Fannie Mae to increase the number of lower and

middle-income

>> families and individuals who could get a mortgage and, thus,

own a

>> home and that to accomplish that Fannie Mae lowered their

standard for

>> credit, these subprime mortgages. And while the article said

it was

>> well intentioned, it was dangerous. Would you agree with

that?

>>

>> Fmr. Pres. CLINTON: I think, through the lens of this, it

looks like

>> that was true. ”

>

> Wow that’s amazing. He actually admitted the truth. I will give

him a

> little bit of credit for being honest about this.

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