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Old 05-04-2021, 12:39 PM
 
Location: Long Island
28,414 posts, read 16,102,513 times
Reputation: 7899

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Quote:
Originally Posted by serger View Post


nope


1995 clinton (through his chief of HUD (Henry Cisneros and later his second chief andrew coumo)) eased the rules on obtaining mortgages allowing more 'exotic' mortgages and 'no-doc/low doc' mortgages-----the consequence ......housing SKYROCKETED causing low inventories causing a 'not normal' increase in home prices, sellers got greedy, buyers got even greedier (looking to PROFIT in a skyrocketing market by flipping) and bought THINKING that prices would still increase and their ADJUSTABLE mortgage would pay it self off in MINIMUMAL years...EVEN THOUGH THESE INCREASES IN HOME VALUES WERE TOTALLY UNHEARD OF, AND MORTGAGE RATES WERE AT 40 YEAR LOWS( what did they think an adjustable mortgage gotten at 40 year lows would do in the term(3 months-3years) when it adjusted...of course it would go up, their CONTRACT even said after the term it would be 6% PLUS PRIME)))
For many potential homebuyers, the lack of cash available to accumulate the required downpayment and closing costs is the major impediment to purchasing a home. Other households do not have sufficient available income to to make the monthly payments on mortgages financed at market interest rates for standard loan terms. Financing strategies, fueled by the creativity and resources of the private and public sectors, should address both of these financial barriers to homeownership."
The above is the start of the mortgage meltdon: Clinton's National Homeownership Strategy
Rate this post positively

 
Old 05-04-2021, 12:41 PM
 
Location: Long Island
28,414 posts, read 16,102,513 times
Reputation: 7899
Quote:
Originally Posted by serger View Post


derivatives….hmmm


what about prior to 2001???

the Clinton housing bubble started in 1995....at the direction of his Chief of HUD, Henry Cisneros..and the second chief of HUD Andrew Cuomo


and this is where it starts

Fannie Mae Seeks to Ease Home Buying - NYTimes.com Fannie Mae Seeks to Ease Home Buying - NYTimes.com
Fannie Mae Seeks to Ease Home Buying
By KEITH BRADSHER,
Published: March 10, 1994

Under the new rules, banks would have more flexibility in lending to people who already owe a considerable amount of money or who cannot afford a down payment equal to 20 percent of the price of a home, the people said. Tuesday Announcement

In addition to changing its guidelines, Fannie Mae plans a national educational campaign that will seek to teach recent immigrants and minorities how to obtain mortgages. The campaign will be aimed particularly at immigrants in a dozen "gateway" cities where the percentage of home ownership has been declining.

Mortgage experts have estimated that up to two million American households are excluded from buying homes now because of conservative mortgage lending standards. These include Americans with minor blemishes on their credit records, for such things as changing jobs repeatedly or failing to pay utility bills on time. Most mortgage experts assume that even people who fall behind on other bills will struggle to make mortgage payments lest they lose their homes.

Freddie Mac loosened its guidelines for low-income mortgages a few weeks ago. But Deepak Bhargava, the legislative director of the Association of Community Organizations for Reform Now, a New Orleans-based group of affordable housing advocates, said that Freddie Mac's guidelines remained more restrictive than Fannie Mae's.

Next week's changes in Fannie Mae's guidelines will probably widen the gap between the two institutions' policies, Mr. Bhargava said. Freddie Mac officials did not return phone calls made to their homes and office this evening.

In its proposal, the Fed staff said raising the threshold would increase the availability of credit and ease the regulatory burden on banks without endangering the safety and soundness of the banking industry.

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


Down Payment Hurdle Is Getting Lower - NYTimes.com Down Payment Hurdle Is Getting Lower - The New York Times
Down Payment Hurdle Is Getting Lower
By JAY ROMANO
Published: July 7, 1996

-snip-
THAT has changed in the last few years, however, as secondary-market investors such as the Federal National Mortgage Association, better known as Fannie Mae -- which package blocks of loans and sell them to private investors -- have made it easier for mortgage lenders to market low-down-payment loans.
In 1994, Fannie Mae introduced Fannie 97 -- a 3-percent-down-payment program for home buyers with good income and credit history who have been unable to save for a down payment. Under both programs, qualified buyers in the New York region who have total household incomes of $70,950 or less are eligible.
----------------------
Homeowners Record Is Set in Third Quarter - NYTimes.com Homeowners Record Is Set in Third Quarter - The New York Times
Homeowners Record Is Set in Third Quarter
By STEVEN A. HOLMES
Published: November 1, 1997


In 1995, seeking to save his department from elimination by the newly elected Republican-led Congress, Housing Secretary Henry G. Cisneros adopted a ''national homeownership strategy'' that eased requirements to qualify for Federal Housing Administration-insured loans and reduced closing costs by as much as $1,200 on those loans for first-time buyers.

------------------------------------------
.

125% Loan: Blessing Or Bane?
By JAY ROMANO
Published: July 13, 1997
RESPONDING to the seemingly insatiable demand by borrowers for ever more exotic forms of credit, some aggressive lenders have brought to market a rather unconventional mortgage product: the 125 percent loan.

With such a loan, homeowners -- even those with less-than-pristine credit -- can borrow up to 125 percent of the market value of their homes by pledging collateral that doesn't exist.

Lenders who make such loans say they are effective credit tools that can be used by homeowners to raise cash for unexpected expenditures, get out from under high-interest credit-card debt or pay for home improvements that will in turn increase the owner's equity.

''The underwriting criteria (from the government) are actually more flexible,'' Mr. Levy said. ''They allow more dinks on your credit and a more narrow spread between what you make and what you pay out.''

And that is just what concerns Mr. Bader of Skyscraper Mortgage.

''The person who couldn't qualify for an ordinary home equity loan at 8 percent is now borrowing even more money at 14 percent,'' Mr. Bader said, adding that anyone thinking about taking out such a loan should contemplate the following:

''What happens if you want to sell your property, and you find that what you owe is more than what your property is worth?''
125% Loan - Blessing Or Bane? - NYTimes.com

==========================

Defending Home Turf From Attack; Fannie Mae Is Facing Assault By House Panel and Business Rivals
By RICHARD W. STEVENSON
Published: April 22, 2000
Defending Home Turf From Attack - Fannie Mae Is Facing Assault By House Panel and Business Rivals - NYTimes.com

Shareholder owned but federally chartered, it is an odd hybrid that dominates the business of channeling money between lenders and Wall Street by buying mortgages and packaging them into securities. Its chief executive, Franklin D. Raines, is a former White House budget director whose name has been floated by Vice President Al Gore's presidential campaign as a possibility for the No. 2 spot on the Democratic ticket, and its executives have close ties to both parties.

Government-sponsored enterprise debt also is counted as safer than traditional corporate debt by regulators when they assess the financial strength of banks. As a result, many banks have made such debt a big part of their capital base, a situation that has left some regulators and members of Congress speculating about the implications for the financial system if Fannie Mae or Freddie Mac were to get into serious financial trouble.
=========================================


U.S. Proposes Rules to Help House Buyers
Published: March 05, 2000

The federal government (HUD) has proposed new rules that would make it easier for low-income house buyers to qualify for mortgage loans, a move intended to help blacks and other minorities buy houses.

The proposed rules from the Department of Housing and Urban Development would require two of the largest housing finance companies in the country, Fannie Mae and Freddie Mac, to increase the percentages of overall loans that they offer to lower-income families from the current standard of 42 percent to 48 percent in 2000 and to 50 percent in 2001.

The companies would be required over the next 10 years to buy $2.4 trillion in mortgages from banks and other lenders to assist the 28 million American families with low and moderate incomes. Many of those families are minorities, housing officials said.

''This rule will greatly expand the supply of affordable housing across the country,'' said Housing Secretary Andrew M. Cuomo.

The companies(fannie/freddie) buy mortgages for homes and apartment buildings from banks, savings and loans and other mortgage lenders, and package and sell the loans to investors. When Freddie Mac and Fannie Mae buy mortgages from lenders, they provide the lenders with cash to issue new mortgages.

Under the higher goals, the companies would buy an additional $488.3 billion in mortgages over the next 10 years for seven million more low- and moderate-income families. The new mortgages would be added to the $1.9 trillion in mortgages for about 21 million families that would have been helped by the current standards.

Mr. Cuomo said that Fannie Mae and Freddie Mac were cooperating with federal regulators on this issue. The Housing Department said it was reviewing fair-lending practices at Fannie Mae. The two companies can do more, Mr. Cuomo said, and that led to the elevated goals.

The requirements for mortgage purchases were last set in 1995. The goals were up for renewal this year, as required by Congress. The housing administration could have lowered the goals or have left them unchanged.
U.S. Proposes Rules to Help House Buyers - NYTimes.com

===========================

this from 1999

Fannie Mae Eases Credit To Aid Mortgage Lending - NYTimes.com
Fannie Mae Eases Credit To Aid Mortgage Lending - NYTimes.com
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: September 30, 1999


.......... the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

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. ''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.

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.


see the words in bold....very telling

============================

Giving Credit Where Credit Was Denied

Published: June 08, 1997
Giving Credit Where Credit Was Denied - NYTimes.com
Mr. Kent received what his lender, GFI Mortgage Bankers, calls its ''no-doc product'' -- as in no documents needed.

''With the Federal Government directing it, we've created new products for people who have glitches, hairy credit,'' said Abe Eisner, executive vice president of GFI. ''No-doc means all we need is your name, address and Social Security number, depending on your credit history.''

GFI is a barometer for the industry; its subprime lending currently represents about 25 percent of the company's business. Two years ago, it was 10 percent.

--snip-....

One measure of the expanding subprime market is the number of loans that have been packaged and sold as asset-backed securities -- meaning that investors buy shares in those resold loans and then reap the returns as the mortgages are paid off.

--snip--
According to Jay Siegel, a vice president at Moody's Investor Service: ''Subprime loans have exploded from $7 billion in 1992 to $37 billion in 1996 as a sector of the entire securitized conventional loan market.'' That $37 billion, Mr. Siegel said, represents 11 percent of all the conventional loans that were securitized in 1996, up from 1.4 percent in 1992.
--snip--

--snip--

Even quasi-governmental agencies have primed the subprime pump. The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) have recently developed computerized underwriting systems that allow lenders to speedily and reliably evaluate an applicant's credit-worthiness. The loans rejected by the automated system are, by definition, subprime.

''In the past, if a loan was rejected by Fannie Mae or Freddie Mac, that was it,'' Mr. Hornblass said. ''They weren't touching that business.

''But now both agencies have set up arrangements with lending companies that buy those subprime loans coming through the automated systems. Freddie Mac and Fannie Mae take a fee, the loans get funneled to a lending company that's willing to buy them, package them and then sell the securities to investors.''

The agencies have also, for the first time, become guarantors of subprime loans. In fact, on May 21, Freddie Mac agreed to guarantee the securitization of $227.3 million in subprime loans originated by the First Union Home Equity Bank.

Several industry analysts point out that the trend toward subprime lending has been a boon to the nation's affordable housing movement. ''There are more subprime opportunities that dovetail well with C.R.A.-required lending,'' said Mr. Gumbinger

--snip--

C.R.A. is the Community Reinvestment Act, a law passed by Congress in 1977 to combat red-lining -- the systematic policy of banks to avoid making loans in poor communities. The law requires Federally regulated banks and savings and loans, but not mortgage banks, to ''help meet the credit needs of communities in which they are chartered.'' If one of those lenders applies to Federal regulatory agencies for a merger or a new charter, it must demonstrate that it has originated a sufficient number of loans in low- and moderate-income neighborhoods.

According to data provided by Douglas Duncan, a senior economist at the Mortgage Bankers Association of America, 19.2 percent of the nation's home loans in 1993 went to minority-group members. By 1995 the first year of the changes, that share had risen to 22.2 percent.

--snip--

see full article.. Giving Credit Where Credit Was Denied - NYTimes.com

=================
Published: June 25, 2000

Lenders are not required to cancel the insurance for loans approved before July 29, 1999, when the Homeowners Protection Act took effect, but most do, if only to remain in the good graces of Fannie Mae and the similar federal agency, Federal Home Loan Mortgage Corporation or Freddie Mac. Because these two agencies set the standards for the mortgages they will buy, Fannie Mae and Freddie Mac have enormous influence over the mortgage market.
The Mortgage Market - Up, Down and Sideways - NYTimes.com

=======================

Published: October 3, 1999

But it got greater impetus in late 1994 when Fannie Mae, the nation's largest purchaser of mortgages from banks and other home-mortgage originators, introduced pilot programs to stimulate the home sales market in New York and Boston. Fannie Mae packages these loans with other mortgages as securities for sale to investors. Creating a market to which mortgage originators can sell their loans encourages them to lend more

There have been 14,000 Partnership home buyers since 1986, and more and more of the newer houses are three-families. Nowadays the loans are normally sold to Fannie Mae, and the underwriting for them follows Fannie Mae's standards.
1999 new york times
Easing the Rules for Mortgage Approval - NYTimes.com


===============
hmmmmmmmm

Keeping Homeowners in Their Homes - NYTimes.com

...In 1995, the Clinton Administration changed the law governing GSEs' mission -- the Community Reinvestment Act (CRA) -- to encourage more lending in poor neighborhoods.

Previously, the CRA directed government to monitor banks' lending practices to make sure they did not violate fair lending rules in poor neighborhoods.
--snip--
....With the 1995 change, the government published each bank's lending activity and started giving bank ratings based primarily upon the amount of lending it performed in poor neighborhoods.
--snip--
These changes empowered community organizations, such as ACORN, to pressure banks to increase lending activities in poorer neighborhoods -- which involved reducing mortgage loan standards -- or face backlash from those organizations' private and political associates.
--snip--
For example, if Chase or BOA made 100 mortgages in a poor Chicago district, and Countrywide 150, the government would likely give Chase a lower CRA rating, and community organizers could pressure politicians to make it more difficult for Chase to get licensed to do full ranges of business in new areas of the country. Low CRA ratings could also disadvantage Chase with regard to government lending programs and make it more difficult for Chase to participate in mergers and acquisitions through Fannie Mae, the government controlled banks' mortgage lending activity rates.

Throughout the Congressional debate on GSE regulations in 2003-2005, senior Congressional Democrats repeatedly inferred -- even directly stated on at least one public occasion -- the US federal government would bail Fannie Mae out if required.

--snip-

In written law, the US government only 100% guarantees Ginnie Mae. The other major two GSEs, Fannie Mae and Freddie Mac, exist in more of a grey area. Nothing explicitly states the federal government is 100% behind them, but it has always been implied. That is why statements of top government officials in the run up to the bubble are so very important, as are actions like the US President personally appointing Fannie's CEO and directors.

From 1993-1999, the Clinton Administration replaced many of Fannie Mae's key executives, including the CEO, the CEO's number two, and nearly half the board of directors. As a government sponsored enterprise (GSE), the President had the authority to make those appointments. The board, which increasingly consisted of Presidential appointments, incentivize them to reach higher mortgage targets. More specifically, the board promised senior executive millions in bonuses each year as long as Fannie reported certain earnings figures.

Just a quick reminder... Fannie's ability to reach earnings targets is directly related to the number of mortgages it buys, as long as those mortgages do not default or as long as Fannie executives do not recognize negative changes in the payment flow.

In fact, according to the federal Department of Housing and Urban Development, 14.9 percent -- or 2.1 million -- of all mortgages originated in the United States in 1999 went to subprime borrowers. ''Over 90 percent of subprime loans have been made in the last six years,'' Ms. Bayer said, ''and the subprime market has grown roughly 30 percent each year over the previous year during that time.''

=========================



the CRA/ fannie/ freddie/ HUD/ and the FED(interest rates) had a FULL effect on ALL mortgages

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(subprime).

directly from the new york times in 1999.




all links directly from liberal new York times...all before the GS repeal ......all before bush, all show the culpability of fannie/Freddie/hud...and nothing to do with congress(no matter which party controlled it)


are you going to dis the NYT that give factual info that shows the culpability of F&F, and shows that the cause was BEFORE Bush...or will you keep your rose colored blinders on
Rate this post positively
 
Old 05-04-2021, 01:00 PM
 
4,595 posts, read 1,772,149 times
Reputation: 1834
Quote:
Originally Posted by workingclasshero View Post
nope


1995 clinton (through his chief of HUD (Henry Cisneros and later his second chief andrew coumo)) eased the rules on obtaining mortgages allowing more 'exotic' mortgages and 'no-doc/low doc' mortgages-----the consequence ......housing SKYROCKETED causing low inventories causing a 'not normal' increase in home prices, sellers got greedy, buyers got even greedier (looking to PROFIT in a skyrocketing market by flipping) and bought THINKING that prices would still increase and their ADJUSTABLE mortgage would pay it self off in MINIMUMAL years...EVEN THOUGH THESE INCREASES IN HOME VALUES WERE TOTALLY UNHEARD OF, AND MORTGAGE RATES WERE AT 40 YEAR LOWS( what did they think an adjustable mortgage gotten at 40 year lows would do in the term(3 months-3years) when it adjusted...of course it would go up, their CONTRACT even said after the term it would be 6% PLUS PRIME)))
For many potential homebuyers, the lack of cash available to accumulate the required downpayment and closing costs is the major impediment to purchasing a home. Other households do not have sufficient available income to to make the monthly payments on mortgages financed at market interest rates for standard loan terms. Financing strategies, fueled by the creativity and resources of the private and public sectors, should address both of these financial barriers to homeownership."
The above is the start of the mortgage meltdon: Clinton's National Homeownership Strategy
I suggest you read the article.
Rate this post positively
 
Old 05-04-2021, 01:06 PM
 
Location: Long Island
28,414 posts, read 16,102,513 times
Reputation: 7899
Quote:
Originally Posted by serger View Post
I suggest you read the article.
so go with one persons OPINION, and not go with facts... how very liberal of you


Fannie and Freddie are government-sponsored enterprises (GSEs).. The GSEs use
derivatives to reduce, but not eliminate, default risk.





Keeping Homeowners in Their Homes - NYTimes.com

...In 1995, the Clinton Administration changed the law governing GSEs' mission -- the Community Reinvestment Act (CRA) -- to encourage more lending in poor neighborhoods.

Previously, the CRA directed government to monitor banks' lending practices to make sure they did not violate fair lending rules in poor neighborhoods.
--snip--
....With the 1995 change, the government published each bank's lending activity and started giving bank ratings based primarily upon the amount of lending it performed in poor neighborhoods.
--snip--
These changes empowered community organizations, such as ACORN, to pressure banks to increase lending activities in poorer neighborhoods -- which involved reducing mortgage loan standards -- or face backlash from those organizations' private and political associates.
--snip--
For example, if Chase or BOA made 100 mortgages in a poor Chicago district, and Countrywide 150, the government would likely give Chase a lower CRA rating, and community organizers could pressure politicians to make it more difficult for Chase to get licensed to do full ranges of business in new areas of the country. Low CRA ratings could also disadvantage Chase with regard to government lending programs and make it more difficult for Chase to participate in mergers and acquisitions through Fannie Mae, the government controlled banks' mortgage lending activity rates.

Throughout the Congressional debate on GSE regulations in 2003-2005, senior Congressional Democrats repeatedly inferred -- even directly stated on at least one public occasion -- the US federal government would bail Fannie Mae out if required.

--snip-

In written law, the US government only 100% guarantees Ginnie Mae. The other major two GSEs, Fannie Mae and Freddie Mac, exist in more of a grey area. Nothing explicitly states the federal government is 100% behind them, but it has always been implied. That is why statements of top government officials in the run up to the bubble are so very important, as are actions like the US President personally appointing Fannie's CEO and directors.

From 1993-1999, the Clinton Administration replaced many of Fannie Mae's key executives, including the CEO, the CEO's number two, and nearly half the board of directors. As a government sponsored enterprise (GSE), the President had the authority to make those appointments. The board, which increasingly consisted of Presidential appointments, incentivize them to reach higher mortgage targets. More specifically, the board promised senior executive millions in bonuses each year as long as Fannie reported certain earnings figures.

Just a quick reminder... Fannie's ability to reach earnings targets is directly related to the number of mortgages it buys, as long as those mortgages do not default or as long as Fannie executives do not recognize negative changes in the payment flow.

In fact, according to the federal Department of Housing and Urban Development, 14.9 percent -- or 2.1 million -- of all mortgages originated in the United States in 1999 went to subprime borrowers. ''Over 90 percent of subprime loans have been made in the last six years,'' Ms. Bayer said, ''and the subprime market has grown roughly 30 percent each year over the previous year during that time.''




=======================


Giving Credit Where Credit Was Denied

Published: June 08, 1997
Giving Credit Where Credit Was Denied - NYTimes.com
Mr. Kent received what his lender, GFI Mortgage Bankers, calls its ''no-doc product'' -- as in no documents needed.

''With the Federal Government directing it, we've created new products for people who have glitches, hairy credit,'' said Abe Eisner, executive vice president of GFI. ''No-doc means all we need is your name, address and Social Security number, depending on your credit history.''

GFI is a barometer for the industry; its subprime lending currently represents about 25 percent of the company's business. Two years ago, it was 10 percent.

--snip-....

One measure of the expanding subprime market is the number of loans that have been packaged and sold as asset-backed securities -- meaning that investors buy shares in those resold loans and then reap the returns as the mortgages are paid off.

--snip--
According to Jay Siegel, a vice president at Moody's Investor Service: ''Subprime loans have exploded from $7 billion in 1992 to $37 billion in 1996 as a sector of the entire securitized conventional loan market.'' That $37 billion, Mr. Siegel said, represents 11 percent of all the conventional loans that were securitized in 1996, up from 1.4 percent in 1992.
--snip--

--snip--

Even quasi-governmental agencies have primed the subprime pump. The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) have recently developed computerized underwriting systems that allow lenders to speedily and reliably evaluate an applicant's credit-worthiness. The loans rejected by the automated system are, by definition, subprime.

''In the past, if a loan was rejected by Fannie Mae or Freddie Mac, that was it,'' Mr. Hornblass said. ''They weren't touching that business.

''But now both agencies have set up arrangements with lending companies that buy those subprime loans coming through the automated systems. Freddie Mac and Fannie Mae take a fee, the loans get funneled to a lending company that's willing to buy them, package them and then sell the securities to investors.''

The agencies have also, for the first time, become guarantors of subprime loans. In fact, on May 21, Freddie Mac agreed to guarantee the securitization of $227.3 million in subprime loans originated by the First Union Home Equity Bank.

Several industry analysts point out that the trend toward subprime lending has been a boon to the nation's affordable housing movement. ''There are more subprime opportunities that dovetail well with C.R.A.-required lending,'' said Mr. Gumbinger

--snip--

C.R.A. is the Community Reinvestment Act, a law passed by Congress in 1977 to combat red-lining -- the systematic policy of banks to avoid making loans in poor communities. The law requires Federally regulated banks and savings and loans, but not mortgage banks, to ''help meet the credit needs of communities in which they are chartered.'' If one of those lenders applies to Federal regulatory agencies for a merger or a new charter, it must demonstrate that it has originated a sufficient number of loans in low- and moderate-income neighborhoods.

According to data provided by Douglas Duncan, a senior economist at the Mortgage Bankers Association of America, 19.2 percent of the nation's home loans in 1993 went to minority-group members. By 1995 the first year of the changes, that share had risen to 22.2 percent.

--snip--

see full article.. Giving Credit Where Credit Was Denied - NYTimes.com

=================




U.S. Proposes Rules to Help House Buyers
Published: March 05, 2000

The federal government (HUD) has proposed new rules that would make it easier for low-income house buyers to qualify for mortgage loans, a move intended to help blacks and other minorities buy houses.

The proposed rules from the Department of Housing and Urban Development would require two of the largest housing finance companies in the country, Fannie Mae and Freddie Mac, to increase the percentages of overall loans that they offer to lower-income families from the current standard of 42 percent to 48 percent in 2000 and to 50 percent in 2001.

The companies would be required over the next 10 years to buy $2.4 trillion in mortgages from banks and other lenders to assist the 28 million American families with low and moderate incomes. Many of those families are minorities, housing officials said.

''This rule will greatly expand the supply of affordable housing across the country,'' said Housing Secretary Andrew M. Cuomo.

The companies(fannie/freddie) buy mortgages for homes and apartment buildings from banks, savings and loans and other mortgage lenders, and package and sell the loans to investors. When Freddie Mac and Fannie Mae buy mortgages from lenders, they provide the lenders with cash to issue new mortgages.

Under the higher goals, the companies would buy an additional $488.3 billion in mortgages over the next 10 years for seven million more low- and moderate-income families. The new mortgages would be added to the $1.9 trillion in mortgages for about 21 million families that would have been helped by the current standards.

Mr. Cuomo said that Fannie Mae and Freddie Mac were cooperating with federal regulators on this issue. The Housing Department said it was reviewing fair-lending practices at Fannie Mae. The two companies can do more, Mr. Cuomo said, and that led to the elevated goals.

The requirements for mortgage purchases were last set in 1995. The goals were up for renewal this year, as required by Congress. The housing administration could have lowered the goals or have left them unchanged.
U.S. Proposes Rules to Help House Buyers - NYTimes.com

===========================




look at the bolded highlights.....

Last edited by workingclasshero; 05-04-2021 at 01:16 PM..
Rate this post positively
 
Old 05-04-2021, 02:01 PM
 
4,595 posts, read 1,772,149 times
Reputation: 1834
Quote:
Originally Posted by workingclasshero View Post
so go with one persons OPINION, and not go with facts... how very liberal of you


Fannie and Freddie are government-sponsored enterprises (GSEs).. The GSEs use
derivatives to reduce, but not eliminate, default risk.





Keeping Homeowners in Their Homes - NYTimes.com

...In 1995, the Clinton Administration changed the law governing GSEs' mission -- the Community Reinvestment Act (CRA) -- to encourage more lending in poor neighborhoods.

Previously, the CRA directed government to monitor banks' lending practices to make sure they did not violate fair lending rules in poor neighborhoods.
--snip--
....With the 1995 change, the government published each bank's lending activity and started giving bank ratings based primarily upon the amount of lending it performed in poor neighborhoods.
--snip--
These changes empowered community organizations, such as ACORN, to pressure banks to increase lending activities in poorer neighborhoods -- which involved reducing mortgage loan standards -- or face backlash from those organizations' private and political associates.
--snip--
For example, if Chase or BOA made 100 mortgages in a poor Chicago district, and Countrywide 150, the government would likely give Chase a lower CRA rating, and community organizers could pressure politicians to make it more difficult for Chase to get licensed to do full ranges of business in new areas of the country. Low CRA ratings could also disadvantage Chase with regard to government lending programs and make it more difficult for Chase to participate in mergers and acquisitions through Fannie Mae, the government controlled banks' mortgage lending activity rates.

Throughout the Congressional debate on GSE regulations in 2003-2005, senior Congressional Democrats repeatedly inferred -- even directly stated on at least one public occasion -- the US federal government would bail Fannie Mae out if required.

--snip-

In written law, the US government only 100% guarantees Ginnie Mae. The other major two GSEs, Fannie Mae and Freddie Mac, exist in more of a grey area. Nothing explicitly states the federal government is 100% behind them, but it has always been implied. That is why statements of top government officials in the run up to the bubble are so very important, as are actions like the US President personally appointing Fannie's CEO and directors.

From 1993-1999, the Clinton Administration replaced many of Fannie Mae's key executives, including the CEO, the CEO's number two, and nearly half the board of directors. As a government sponsored enterprise (GSE), the President had the authority to make those appointments. The board, which increasingly consisted of Presidential appointments, incentivize them to reach higher mortgage targets. More specifically, the board promised senior executive millions in bonuses each year as long as Fannie reported certain earnings figures.

Just a quick reminder... Fannie's ability to reach earnings targets is directly related to the number of mortgages it buys, as long as those mortgages do not default or as long as Fannie executives do not recognize negative changes in the payment flow.

In fact, according to the federal Department of Housing and Urban Development, 14.9 percent -- or 2.1 million -- of all mortgages originated in the United States in 1999 went to subprime borrowers. ''Over 90 percent of subprime loans have been made in the last six years,'' Ms. Bayer said, ''and the subprime market has grown roughly 30 percent each year over the previous year during that time.''




=======================


Giving Credit Where Credit Was Denied

Published: June 08, 1997
Giving Credit Where Credit Was Denied - NYTimes.com
Mr. Kent received what his lender, GFI Mortgage Bankers, calls its ''no-doc product'' -- as in no documents needed.

''With the Federal Government directing it, we've created new products for people who have glitches, hairy credit,'' said Abe Eisner, executive vice president of GFI. ''No-doc means all we need is your name, address and Social Security number, depending on your credit history.''

GFI is a barometer for the industry; its subprime lending currently represents about 25 percent of the company's business. Two years ago, it was 10 percent.

--snip-....

One measure of the expanding subprime market is the number of loans that have been packaged and sold as asset-backed securities -- meaning that investors buy shares in those resold loans and then reap the returns as the mortgages are paid off.

--snip--
According to Jay Siegel, a vice president at Moody's Investor Service: ''Subprime loans have exploded from $7 billion in 1992 to $37 billion in 1996 as a sector of the entire securitized conventional loan market.'' That $37 billion, Mr. Siegel said, represents 11 percent of all the conventional loans that were securitized in 1996, up from 1.4 percent in 1992.
--snip--

--snip--

Even quasi-governmental agencies have primed the subprime pump. The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) have recently developed computerized underwriting systems that allow lenders to speedily and reliably evaluate an applicant's credit-worthiness. The loans rejected by the automated system are, by definition, subprime.

''In the past, if a loan was rejected by Fannie Mae or Freddie Mac, that was it,'' Mr. Hornblass said. ''They weren't touching that business.

''But now both agencies have set up arrangements with lending companies that buy those subprime loans coming through the automated systems. Freddie Mac and Fannie Mae take a fee, the loans get funneled to a lending company that's willing to buy them, package them and then sell the securities to investors.''

The agencies have also, for the first time, become guarantors of subprime loans. In fact, on May 21, Freddie Mac agreed to guarantee the securitization of $227.3 million in subprime loans originated by the First Union Home Equity Bank.

Several industry analysts point out that the trend toward subprime lending has been a boon to the nation's affordable housing movement. ''There are more subprime opportunities that dovetail well with C.R.A.-required lending,'' said Mr. Gumbinger

--snip--

C.R.A. is the Community Reinvestment Act, a law passed by Congress in 1977 to combat red-lining -- the systematic policy of banks to avoid making loans in poor communities. The law requires Federally regulated banks and savings and loans, but not mortgage banks, to ''help meet the credit needs of communities in which they are chartered.'' If one of those lenders applies to Federal regulatory agencies for a merger or a new charter, it must demonstrate that it has originated a sufficient number of loans in low- and moderate-income neighborhoods.

According to data provided by Douglas Duncan, a senior economist at the Mortgage Bankers Association of America, 19.2 percent of the nation's home loans in 1993 went to minority-group members. By 1995 the first year of the changes, that share had risen to 22.2 percent.

--snip--

see full article.. Giving Credit Where Credit Was Denied - NYTimes.com

=================




U.S. Proposes Rules to Help House Buyers
Published: March 05, 2000

The federal government (HUD) has proposed new rules that would make it easier for low-income house buyers to qualify for mortgage loans, a move intended to help blacks and other minorities buy houses.

The proposed rules from the Department of Housing and Urban Development would require two of the largest housing finance companies in the country, Fannie Mae and Freddie Mac, to increase the percentages of overall loans that they offer to lower-income families from the current standard of 42 percent to 48 percent in 2000 and to 50 percent in 2001.

The companies would be required over the next 10 years to buy $2.4 trillion in mortgages from banks and other lenders to assist the 28 million American families with low and moderate incomes. Many of those families are minorities, housing officials said.

''This rule will greatly expand the supply of affordable housing across the country,'' said Housing Secretary Andrew M. Cuomo.

The companies(fannie/freddie) buy mortgages for homes and apartment buildings from banks, savings and loans and other mortgage lenders, and package and sell the loans to investors. When Freddie Mac and Fannie Mae buy mortgages from lenders, they provide the lenders with cash to issue new mortgages.

Under the higher goals, the companies would buy an additional $488.3 billion in mortgages over the next 10 years for seven million more low- and moderate-income families. The new mortgages would be added to the $1.9 trillion in mortgages for about 21 million families that would have been helped by the current standards.

Mr. Cuomo said that Fannie Mae and Freddie Mac were cooperating with federal regulators on this issue. The Housing Department said it was reviewing fair-lending practices at Fannie Mae. The two companies can do more, Mr. Cuomo said, and that led to the elevated goals.

The requirements for mortgage purchases were last set in 1995. The goals were up for renewal this year, as required by Congress. The housing administration could have lowered the goals or have left them unchanged.
U.S. Proposes Rules to Help House Buyers - NYTimes.com

===========================




look at the bolded highlights.....
Ok, you either don't want to read it, or you don't understand it.
To put things in perspective for you - the notional value of OTC derivatives reached 683 TRILLION in mid 2008.
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Old 05-04-2021, 02:14 PM
 
Location: Long Island
28,414 posts, read 16,102,513 times
Reputation: 7899
Quote:
Originally Posted by serger View Post
Ok, you either don't want to read it, or you don't understand it.
To put things in perspective for you - the notional value of OTC derivatives reached 683 TRILLION in mid 2008.
no I do understand it...and did read it...


again


1. that 604t in derivatives was world wide....from the article
Quote:
Officially, roughly $604.6 trillion in OTC derivative contracts, more than ten times world GDP ($57.53 trillion), hang over the financial world like the sword of Damocles, but to the average investor the derivatives bubble is invisible.

2. in the USA the main culprit was housing, outsourcing of jobs and the Clinton fed
Quote:
The failure of Lehman Brothers set off a derivatives chain reaction affecting Lehman's counterparties and directly caused the credit crisis.
and the failure of Lehman was due to...the Clinton housing bubble/bust


Quote:
from your article


In the 2002 annual report of Berkshire Hathaway, Inc., Warren Buffett famously wrote:
The derivatives genie [having been deregulated two years prior] is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. … Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts [emphasis added].


An attempt by the CFTC to regulate OTC derivatives in 1998 was rejected by Alan Greenspan, then Chairman of the Federal Reserve, Robert E. Rubin, then Secretary of the Treasury, and Lawrence ("Larry") H. Summers, then Assistant Secretary of the Treasury.








again this is an opinion piece from Ron Hera
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Old 05-04-2021, 02:16 PM
 
16,934 posts, read 7,984,703 times
Reputation: 16195
Not only is copy/paste absurdity long posts obnoxious but it also loses your audience, they lose interest.
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Old 05-04-2021, 02:18 PM
 
Location: In Your Head
1,259 posts, read 956,334 times
Reputation: 1387
Quote:
Originally Posted by TheGoodTheBadTheUgly View Post
Close shop or ?
Don’t upgrade to the newest iPhone or sell your current iPhone, get a second job and/or a third job, move back in with your parents. You know son sooner or later you’re going to have to pull yourself up by your own bootstraps.
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Old 05-04-2021, 02:21 PM
 
Location: Santa Monica
35,028 posts, read 13,746,234 times
Reputation: 13635
Quote:
Originally Posted by Gemdiver View Post
Don’t upgrade to the newest iPhone or sell your current iPhone, get a second job and/or a third job, move back in with your parents. You know son sooner or later you’re going to have to pull yourself up by your own bootstraps.
LOL

Exactly.
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Old 05-04-2021, 05:13 PM
 
Location: Western North Carolina
5,900 posts, read 8,764,808 times
Reputation: 13121
Quote:
Originally Posted by thefragile View Post
Not only is copy/paste absurdity long posts obnoxious but it also loses your audience, they lose interest.
This is so true.

Most people just pass over huge "wall of text" posts.

I know I do. Exhausting just to look at.

Some people apparently have a lot of time on their hands to post all that stuff.

If you can't make your point in about a paragraph, you might as well just forget it.
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