Fannie Mae Eases Credit To Aid Mortgage Lending
posted by Bob at Tuesday, February 24, 2009
Custom Search
Tuesday, February 24, 2009
A DEMOCRACY TOWN HALL HOME
Do you have a topic you want to discuss at the Town Hall? Email your request to A_Democracy@yahoo.com
“A DEMOCRACY” Disclaimer- While the administrators and moderators of this forum will attempt to remove or edit any generally objectionable material as quickly as possible, it is impossible to review every message. Therefore you acknowledge that all posts made to this forum express the views and opinions of the author and not the administrators, moderators (except for posts by these people) and hence will not be held liable.
You agree not to post any abusive, obscene, vulgar, slanderous, hateful, threatening, sexually-oriented or any other material that may violate any applicable laws. Doing so may lead to you being immediately and permanently banned
THE ROOF GUYS
Mickey's Diner 1950 7th Street West, St Paul, MN
(651) 698-8387
AX-MAN SURPLUS
1639 University Ave.
St. Paul, MN 55104
Tel:(651)646-8653
LANDLORD.COM LINK HERE
SHHHH! While we listen to words of wisdom from a wise man.
Conscience is the light of the Soul that burns within the chambers of our psychological heart. It is as real as life is. It raises the voice in protest whenever anything is thought of or done contrary to the righteousness. Conscience is a form of truth that has been transferred through our genetic stock in the form of the knowledge of our own acts and feelings as right or wrong. A virtuous and courageous person can alone use the instrument of conscience. He or she can alone hear the inner voice of the soul clearly. In a wicked person this faculty is absent. The sensitive nature of his / her conscience has been destroyed by sin or corruption. Hence he or she is unable to discriminate right from wrong. Those who are leading organizations, business enterprises, institutions and governments should develop this virtue of the ability to use their own conscience. This wisdom of using the clean conscience will enable them to enjoy the freedom.
Dr APJ Kalam, President of India given during the inauguration of the seminar on “THE EFFECTS OF CORRUPTION ON GOOD GOVERNANCE AND HUMAN RIGHTS
Previous Posts
- FOLLOW UP letter to Legal aide.. Do landlords and ...
- Do landlords and tenants share equal rights?
- Fair Housing Lawsuits Against The City Of Saint Pa...
- RE: Steinhauser lawsuit depleting city attorneys ...
- St. Paul exempts itself from new housing ordinance...
- 32 homicides reported in metro suburbs in 2008
- Radio Free Nation LIVE Senator Elect Al Franken
- Hurry, Hurry, Get Your Watchdog News!
- Top 'Empty' Cities (rental and housing vacancies)
- MEMORANDUM ON THE GRAND JURY
32 Comments:
And this is precisely why we are in the mess we are in economically. Another bad thing from a Democrat. We should have listened back then.
No, no its not.
That is what the no nothing ditto heads are saying on talk radio but Fannie and Freddie did not buy sub-prime mortgages, package them and sell them on the market.
That was the PRIVATE MARKET - unregulated by George Bush.
Your comment is a part of the big lie that the facists want you to believe.
It wasn't all of the funny mortgages that caused the problems. It wasn't the zero down interest only, for 3 years loans that were sold on the private market to anyone that left fog on a mirror... the real problem was the 3% down mortgages to people with 650 credit scores that Fannie Mae bought.
If Fannie Mae would have stayed at 5% down and 675 credit scores then we wouldn't have had a problem.
And remember don't actually look at the true history and see that it was the private market dropping rates and conditions that forced congress to have Fannie Mae lower their conditions.
REMEMBER FANNIE MAE DOESN'T MAKE LOANS THEY BUY LOANS ALREADY MADE BY PRIVATE BANKS.
JMONTOMEPPOF
Chuck Repke
What are you talking about Repke? Did you read the story? Banks made those loans cause they were being pressured by Democrats. Fanny and Freddie bought them and gave money to Democrats. Now that Democrats are in the White House, the poeple working at Fannie and Freddie are in the cabinet. Republicans tried to sound the bell a long time ago, but Deomcrats would'nt have it. You're a Democrat aren't ya Chuck?
Stick around Sue....I think we're gonna need you before too long.
This is a great article.Isn't the New York Times a liberal paper?Looks like the writing was on the wall when slick willy was in office.Its so funny that now the government wants Fannie and Freddie to do the same thing but worse.I just can't believe my own eyes reading this article.
FORGET IT ALL!ITS BUSH WHO DID IT!
~Steven
Look morons, Fannie and Freddy throughout the entire process maintained a level of acceptability on the loans that they would buy from the banks.
It was Merryl Lynch and the other brokerage houses that packaged up the garbage and sold shares of them on the open market that have the banks in trouble.
Fannie in Freddie didn't get anyone into trouble but themselves.
And they were driven to it because the banks were lowering their rates, terms and conditions and the Fed said that they had to buy some of them to keep freeing up capitol.
The community reinvestment act has nothing to do with the bull shit that the brokerage houses put together.
It is right wing bull shit to blame their disaster in support of the fat cats greed on the low income home buyer.
It is 100% garbage.
If all of the problems were the loans Fannie and Freddie bought, then why are the banks stuck with all of this worthless paper?
Think you dolts.
Fannie and Freddie wouldn't buy the shit they were selling!
You guys would have done real well in Germany. The bigger the lie the more you believe it.
JMONTOMEPPOF
Chuck Repke
Freddie Mac relied on Republicans to protect their ass
WASHINGTON – Lawyers hired by mortgage finance giant Freddie Mac are quietly investigating the firm's own $2 million lobbying campaign, The Associated Press has learned. The lobbying effort helped quash proposed new regulations on the company before the housing market collapsed.
The inquiry inside Freddie Mac follows stories by the AP about the company secretly hiring Republican consulting firm DCI Group of Washington to stop a proposal in the Senate in 2005 sponsored by Sen. Chuck Hagel, R-Neb. The legislation would have forced Freddie Mac and Fannie Mae to sell hundreds of billions of dollars worth of assets from their portfolios of mortgages and mortgage-backed securities. At the time, the portfolios were highly lucrative but their value plunged when the housing market collapsed.
The people familiar with the internal inquiry told the AP that Anthony has interviewed current and former Freddie Mac employees about three issues raised by the AP stories:
_An accounting of the work done for the $2 million in payments to the DCI Group. It targeted 17 Republican senators in 13 states working to defeat Hagel's regulatory legislation by convincing prominent constituents and financial contributors the bill would hurt the housing boom. The measure was never brought to a vote and died.
_An accounting of six-figure payments to 52 outside lobbying firms and political consultants in 2006, including details about what work, if any, the consultants performed for the money paid to their firms. The consultants included former House Speaker Newt Gingrich and ex-Sen. Alfonse D'Amato. The payments to the 52 consultants amounted to $11.7 million. D'Amato's firm, which was paid $240,000, declined to comment. Gingrich's firm was paid $300,000 for strategic advice on a number of issues.
_An accounting of personal use by Freddie Mac executives of company-paid tickets and a company-leased skybox at the Verizon Center. Freddie Mac executive Hollis McLoughlin, who oversaw the $2 million campaign by DCI, was photographed by the AP in Freddie Mac's leased skybox four months ago at the season home opener of the Washington Capitals hockey team.
Covington & Burling has represented Freddie Mac in other controversies, including its defense against charges it made illegal campaign contributions. Freddie Mac settled the matter by paying a record $3.8 million fine imposed by the Federal Election Commission in 2006. Separately, Covington & Burling represented Freddie Mac in roughly 20 lawsuits alleging the company fraudulently inflated the price of its stock from 1999-2002. All have been settled.
Here's an honest take on what brought this on, without the political shots.
Bill Cullen and I kind of discussed this at a more detail level last November. In short, there are three culprits:
1. Mortgage brokers. They had little incentive to say “no” to someone seeking a loan. If a someone defaults on that loan later — as Americans increasingly are doing — it’s someone else’s problem. Mortgage brokers don't get paid for turning people away.
2. People’s inability to say “no” to taking on more debt than they could afford.In contrast to what Gordon Gekko said, greed is not good. It wasn't just poor people, the foreclosure wave began in the upper burbs like Minnetonka and Medina.
3. Wall Street’s packaging and selling of these mortgages to investors greatly complicated the situation because they created greater demand for subprime loans. Let's face it. Individuals became rich overnight and certain banking and investment firms became sure winners. Lax regulations and regulators were absent in having any teeth to try and curb this.
Years from now, it will be a historic case study of why regulation is necessary and the free market will bleed itself to death without it.
Eric
Great Comments exept for poor language
Homeowner Affordability and Stability Plan will offer assistance to as many as 7 to 9 million homeowners making a good-faith effort to stay current on their mortgage payments, while attempting to prevent the destructive impact of foreclosures on families and communities. It will not provide money to speculators, and it will target support to the working homeowners who have made every possible effort to stay current on their mortgage payments."
Forget the spin Eric. It's been Democrats raping this country for a long long time now. The Republicans just tried to stop it, and now the DFL is moving in for the death blow with this trojan horse they call stimulus.
Chuck said:
You guys would have done real well in Germany. The bigger the lie the more you believe it.
JMONTOMEPPOF
Chuck Repke
Just remember chuck, this blog would have never gotten off the ground except for the city using Nazi tacktics, which you support like an athletic supporter.
Eric a couple good points but why is the democratic lead government screaming at banks to loan money.They also still talk about more low income and minority loans.They also want banks to redo mortgages to people who defaulted.
ISN"T THIS THE PROBLEM IN THE FIRST PLACE.BANKS BORROWING MONEY TO PEOPLE WHO CAN'T PAY IT BACK WITH ARTIFICIALLY LOW RATES?
The people getting loans and money from banks should be good for the pay back!
Jim
Let em all fall and the incestors will pick em up for 10 cents on the dollar.
No Jim. All three are in equally, loan brokers, homebuyers, Wall Street- all in equally.
You are perhaps unintentionally using an example that is a well used tactic to scapegoat a weaker group. Some other time we can walk through decades of civilization, war, and development in America, Europe and Asia since the Industrial Revolution began (around 1840)and I'll cite examples of that very tactic being used to justify everything from Jim Crow norms, concentration camps, arpartied, segregation, discrimination, castes etc. Some other time.
There was no order to make loans to unqualified people of any race or class. No law, no rule. None.
Artificial rates or, subprime rates are a creation of Wall Street after deregulation. It didn't matter since the loans changed hands so much and every organization that touched it made money.
Eric
1:50
I'll play your game.
List five ways the Republicans tried to 'stop the raping' of the country.
On another thread list your disagreement with the stimulus.
I said list them so that we can see point by point and I can respond. Don't come back with rhetorical bs. Go to recovery.gov and read it.
Eric
All the stimulus does is pack government agencies with pork and the only ones getting jobs are your rich union friends. Meanwhile the average worker gets $7.00 a week. That's an insult.
Interesting debate! I want to set the record straight on a few items.
First of all, the banks did not set the interest rates...Greenspan did! The banks determined the points paid by the borrowers, and the yield spread premiums paid to the mortgage brokers.
It is true that Fannie Mae and Freddie Mac purchase loans from lenders, once the loan is closed. However, the banks underwrite the loans according to Fannie Mae and Freddie Mac Uniform Underwriting Guidelines.
In other words, FNMA and FHLMC set the guidelines for loan approvals: minimum credit score, LTV, DTI, reserves, etc.
During what we called the "refi boom" FNMA and FHLMC loosened their guidelines, and as long as the FNMA and FHLMC automated underwriting system accepted the loan, lenders were allowed to approve them.
As a FNMA/FHLMC underwriter, I had some concerns and voiced them to deaf ears.
The first concern that I had was the incredible number of mortgage applications in which a non-resident alien whose VISA expired in 6 months was allowed to purchase 20 investment properties (many in St. Paul). The limit was eventually lowered to 10. But when I asked how come someone whose VISA was about to expire could get approved for one mortgage, let alone 10 or 20, I was told "we do not work for immigration, that is not our job to worry about that". I didn't think that policy made any sense because there was no guarantee that the applicant's VISA would be renewed. The overall document verification process for these loans would make you cringe!
The other major problem I had was when Congress passed the "American Dream Inititative" in 2003. Basically, this was a 100% loan product that required a minimum credit score of 620, and no collections or judgements (if the borrower had any, they had to be paid before closing).
If the borrower had no established credit history, they could provide 5 items such as insurance, phone, electric, etc. (including a letter from their landlord showing that they paid their rent on time)to prove that they had paid all of their bills on time. The lender, per FNMA/FHLMC via The American Dream Initiative would review those items and consequently create what was called a "non-traditional" credit score of 620.
In addition to that, the borrower could claim an additional 25% of their gross monthly income, which the lender did not verify. So, say the borrower's gross monthly income was $2,800.00. They could, simply, claim they made an additional $700.00 by babysitting, side paint jobs, etc. This enabled the borrower to meet the minimum debt to income ratio so they could qualify for the loan.
This program was so successful that President Bush bragged often about the fact that the program helped record numbers of minorities purchase their first homes. He was correct, but less than truthful.
The truth about that program is that it was geared to help non-American citizens and recent immigrants purchase homes. Yes, they were minorities. But, the overwhelming number of these loans were for borrowers from Asia, India, and Africa, not the USA.
The American Dream Initiative was unfair to American citizens who lived and worked here their entire lives because, more often than not, life-long Americans who might not have had established credit histories, good or bad, had many medical collections on their public records which, without being paid off first, automatically disqualifed them from being approved for the loan program.
The sub-prime market is a monster of another color. Loan officers were popping up like cockroaches and often targeted certain homeowners and first time buyers and talked them in to a 2/1 ARM products and what they called "blended loans".
Residential Appraisers crawled out of the woodwork, as well. They were another huge part of the problems we face today.
After the interest rates rose, and the boom ended, most of us were laid off. So, over the next year, I volunteered many hours of my time trying to educate people and some local St. Paul community organizations about the credit approval process and predatory lending practices.
I thought I'd throw my 2 cents in, since I actually worked in the industry.
Eric did you read the article?Did wallstreet lower the rates?Go back read the article that was written by a liberal paper that saw this crisis 10 years before its time.Eric I'm in the market and have been for many years.You have been a governmet appendage pretty much your whole life.Both democrats and republicans are to blame here.It just happen to start with democrats.You guys are the ones that want home owner ship for all at all costs.No matter what peoples credit is.That was the big push in St.Paul 8-10 years ago.St.Paul officials wanted less rentals more home ownership.Now Barack and his buddies are doing it all over.Its a failure and it is going to continue this downward spiral.
John McCain warned congress,Bush warned congress and I'll name three more when you give me 2 democrats that tried to do something.Remember it was Pelosi and gang who was in control of congress for 2 years before this all began.
Jim
I wish 5:39 had posted their name. The description seemed right on.
Eric is right; we did discuss this in Nov and I agree with the basic points he posted. However, we also concluded that Fannie and Freddie, like Mortgage backed securities, created a demand for loans with very questionable underwriting. 5:39 did a great job describing it.
I would love to make this a partisan issue. There is VERY clear evidence Clinton’s leadership started much of the loose underwriting standards and Bush continued them. In fact, I remember Bush applauding the increasing home ownership numbers at most of his state of the state speeches. If Bush found the policies so objectionable, he could have stopped them. Unfortunately both parties encouraged risky loans. The surprise to me is that the Democrats are offering all kinds of new incentives to buy homes -- trying to “re-inflate” the bubble.
Eric’s claim this is proof the free market doesn’t work is a simple, partisan conclusion.
Bill Cullen.
Everyone read this again...
5:39 said...
The sub-prime market is a monster of another color. Loan officers were popping up like cockroaches and often targeted certain homeowners and first time buyers and talked them in to a 2/1 ARM products and what they called "blended loans".
-snip-
These are the loans that are sitting out there folks. This is the foreclosure mess.
You can't blame Fannie and Freddie for what they didn't buy. These are the "assets" that bond companies bundled and investors bought. These are the "bad assets" that are killing the market.
It is not the guy that got a thirty year loan on a $120,000 at 5% house on the has gone belly up.
It's that person that went and bought a $500,000 McMansion... and they aren't in the inner city and they weren't where democrats were trying to get the banks to invest.
It is the LLC's that bought 50 houses at $75,000 and then sold them to another LLC at $150,000 and then sold them to another LLC at $200,000 each all at $0 down 3% interest for the first 3 years that are now letting those "assets" go back to the "bank," as the LLC goes out of business.
There are tons of them out there.
Real Estate wasn't the land and the building, it was a freaking "limited asset that would go up in value every years so buy now why the price is cheap..."
So, keep blaming it on the low income home buyers who are still paying their mortgages.
That will keep you Republicans warm at night.
JMONTOMEPPOF
Chuck Repke
Jim,
I'm not sure what an 'appendage of government' means but, I have never been a staffer on the governing side of things. And my previous employers like American Express, MN Trial Lawyers and Primerica Financial Services would be surprised to hear their mission is that of a government appendage.
Anyway, the three points out laid out still stand and are being backed up by what has been written so far.
Democrats wanted more people in homes, and republicans supported the profits brought into the market by some of these loans and the loosened regulations that allowed them to be traded without security. No one did a damn thing politically because it was win-win. Deregulation and loosened practices matched with turning a blind eye was helpful for getting more people into homes, who wouldn't have been able to do so, increasing profits on wall street and inflating the economy.
Everyone- or both sides knew, and did nothing. They did nothing for ten years under the republicans, and for one and half years under the Democrats.
Look at this part taken out of the article:
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 sub-prime 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.
Benefactors according to just the above are the low-income people buying beyond their means, loan brokers and investment bankers. Is there a wonder why this went on until it could not be ignored?
I could show half a dozen of so members of congress putting different legislation forward but, you'll cast it as Democrats bending rules for the poor and I'll retort with Republicans just turning a blind eye to Wall Street. So skip it, they are both in this and both had some opportunity to stop it. Problem was, until recently, it benefited both.
You may the lending business, but I know politics. It was a win-win politically for both sides. Now we're taking the medicine.
Eric
Eric’s claim this is proof the free market doesn’t work is a simple, partisan conclusion.
Bill,
How can it be partisan if I admit that both sides are at fault?
Its philosophical.
Historically, we have had to regulate industry every step of the way going back to 1774.
Many of those regulations and structures of oversight came into existence after abuse in the industry.
Let's not be abstract if you want to discuss this. I'll lay it out on the table and tell you where I will draw support for my statement. In the 18th Century we regulated our trade through tariffs after certain markets were being flooded with foreign cheaper product. The Securities regulations of the nineteenth century leading to the Depression of 1807 and the Panics of 1819 and 1837. The 20th century gives us Panic of 1907, the decade leading up to the Depression, the 70's, 80's and 90's.
Of course we discussing the 21 century now.
Your call cowboy. Show me a time or industry where the unregulated free market did not lead to an economic downfall. I'm not advocating for suffocating regulations but a check on a pure free market. Its never been a successful aspect of Capitalism.
Eric
Chuck wrote:
"You can't blame Fannie and Freddie for what they didn't buy."
Because these GSEs DID BUY a lot of this junk and they encouraged it. If you disagree, then why are taxpayers forking over millions to bail them out?
I accept your answer of both partys.I agree also.
That is why I don't trust government and want to shrink it to a small enough size so the people can keep an eye on them and they can still do what is necessary to run the country.Government is out of control and to big.They spend way to much.Its time for people to remember and believe the power lies in us!
I had great hope for Obama but believe he is just like the rest.Sad to say but maybe he'll snap out of the trance Washington has put on him.
Why can't government spend what they take in?They take in 2.5 Tillion thats what the get to spend-that would help stop them from stealing from priorities to spend on their wishes.
Eric I respect you willing and able to see that both sides have their greed and agendas.Chuck you need to quit being one sided and understand we the people want nothing good but for America,we just have different ways of getting there.But we the people are different then government bodies.They are a different g=breed and out for themselves.
Jim
Jim
Bill Cullen said...
I wish 5:39 had posted their name. The description seemed right on.
Bill,
I am glad that you found the information I posted helpful. My name is Patty Bruce.
Jim - you are the government.
We the people are the government. That is the entire point of a democracy. We the people decide.
Your friends on the right wing would prefer a Plutocracy - rule by the wealthy. That is always the ultimate desire of their policies. They hide their power grab under issues that we frequently debate here..."property rights."
Their desire to "shrink the government" and "reduce government regulation," is a desire to stop you from having a say in what they can do with the country. Their credo is that wealth makes right... I bought it I own it... you can't say anything about it. They are the princes of capitalism and believe that their inheritance gives them the right to rule.
Believe it or not this land is your land from California to Maine; from Alaska to Florida. If you don't want someone doing open pit mining on a chunk of it, you have a vote. It doesn't matter how much damn money they have you are as powerful as they are...one person one vote.
But, the right wing talking heads don't want you to believe that. They want you to think that it is the weak and powerless that are a threat to you. Like the discussion we are having here... "the problem in the financial world is that we let people with low credit scores and jobs buy property..." what a joke the facts are not there. The loans bought by Fannie and Freddie were bought by Fannie and Freddie, the millions of loans that the banks and investment houses have are nothing to do with Fannie and Freddie... but don't look at the facts... blame the poor for the problems of the rich.
Its amazing, but the bigger the lie the more you guys believe it.
JMONTOMEPPOF
Chuck Repke
Brad
If not for this country Joe Blow wouldn't make the dough...
Never forget how f'ing lucky you are to live in this country.
Where in the hell did Joe Blow make his money? With what cop protecting him and what government insuring the banking system? And what school system educating him?
F'er did it all on his own...
My ass.
JMONTOMEPPOF
Chuck Repke
10:11 - Well Brad if you actually READ history you will find out that is very much what the founding fathers understood and were fighting about.
They didn't like the notion that because someone's father was king that they had the right to be king and to rule. Or that because the King liked someone they could give them a massive land grant.
They were REVOLUTIONISTS and they were revolting against the ruling class, those who the King had granted wealth and power.
They believed in one person one vote.
That's a pretty radical concept.
Remember the wealth in this country starts from their willingness to SHARE the land. All of that land in Western Pennsylvania and Ohio and Kentucky that the King had maintained as land grants to his pals... no good all gone. These radicals let the common man go out there and claim the land for themselves.
They took it from the rich and gave it to the poor.
What a concept.
JMONTOMEPPOF
Chuck Repke
Dick ears the founding fathers didn't want to penalize Joe blow who came from nothing and made something for himself.Address my other points flipper and flopper.Folks this Repke guy is a slimmy one but I'm going to pin his ass to the floor!
Brad
Dick ears the founding fathers didn't want to penalize Joe blow who came from nothing and made something for himself.Address my other points flipper and flopper.Folks this Repke guy is a slimmy one but I'm going to pin his ass to the floor!
Brad
Brad,
Sans the salty language, are you aware that Joe Blow had no rights under the Framers (I assume you're talking about the authors of the constitutions)?
It would be a couple of decades before Joe Blow had a say in anything.
Also, you know what pulled us out of the major recessions and depressions? The government.
You know what creates a strong middle class? The government.
I wouldn't write it if I couldn't back it up. Can you do the same?
Tell us what the 'founders' wanted fo Joe Blow.
Eric
Brad, Adam Smith wasn't a founding father... you could look it up.
JMONTOMEPPOF
Chuck Repke
Post a Comment
<< Home