NY Times Sept 30, 1999 'shocker'! Guess who mucked up Fannie Mae?

[Fatman]

Published on NewsBusters.org (http://newsbusters.org)
1999 NY Times Article Revealed True Cause of Current Fannie Mae Crises
By P.J. Gladnick
Created 2008-09-25 16:25

This is probably an article [1] that the New York Times wishes it didn't have in its archives because it reveals the true culprits behind the current Fannie Mae meltdown. You will find "uncomfortable" truths in this September 30, 1999 article by Steven A. Holmes starting with the title, "Fannie Mae Eases Credit To Aid Mortgage Lending,"  that you won't find in current editions of the New York Times (emphasis mine):

    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.

Get that? Pressure by the Clinton Administration to expand mortgage loans by lowering its credit requirements.

    ''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.''

That would be the same Franklin Raines whom the Washington Post identified as a mortgage and housing adviser for the Obama campaign until that newspaper told us not to rely [1] on its own reporting. We return you now to the article that the New York Times wishes didn't exist:

    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.

Oops! And that is exactly what has happened nine years later. And who were the "killjoys" at the time warning against Fannie Mae easing the credit requirements? That answer is also provided in the NY Times article:

    ''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.''

Yup. The conservative American Enterprise Institute was accurately warning about this impending financial disaster back in 1999. If you don't believe me, then check out the New York Times archive.
Source URL:
http://newsbusters.org/blogs/p-j-gladnick/2008/09/25/1999-ny-times-article-revealed-true-cause-current-fannie-mae-crises

Links:
[1] http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=1

[Hazcat]

And Bush tried to put restraints on them in 2003 that were shot down by the Dems but you'll never hear either of these facts reported in the MSM!

[Fatman]

Actually, Bill Clinton, of all people, did say on the Today show the Dems were to blame. 

[TSB]

Those of us that believe the facts were already aware of this.  The socialists don't believe the facts, they make it up as they go or decide based on what the polls are saying.  Slick Willy was famous for changing his mind based on some rediculous polling.  What a putz...

I'll pass this around the office tomorrow and stir up the pot of liberals I work with.  I'm a stand alone Constitutionalist and severely outnumbered but facts are stubborn things and they need to get the message...

Tim

[Dharmaeye]

Actually, Bill Clinton, of all people, did say on the Today show the Dems were to blame. 

One piece of legislation easied mortgage requirements for Fanny and Freddy to allow the American Dream for minorities and the poor.

[Sponsor]

[Fatman]

One piece of legislation easied mortgage requirements for Fanny and Freddy to allow the American Dream for minorities and the poor.

True, true. Unfortunately, the Old American Dream required you to actually required you to work your way up and be able to afford what you bought. The New American Dream is to live well above your means, and lobby your government to require businesses to hand out loans to very high risk borrowers. People with poor credit have it for a reason. They don't pay their bills. And those poor risks come in all shapes, colors, and economic strata.

[twyacht]

How it went down... "Joe" makes $40,000 a year, applies for a $399,000 house with an ARM he can't afford to begin with, greedy bank approves, than sells the note to AIG, Merrill Lynch, (pick one),....

Than the market tanks, prop values drop, maybe "Joe" gets laid off, bank already made their bling,... note falls short and defaults.

Everything was all LEGAL, due to the laws and regs.  Now the bank can't get cash from the bigger "banks", and they fail. Than the "bigger banks" fail, and now, as a taxpayer, I'm responsible for bailing out poor decisions by greedy bastards who made multi millions in salary and bonuses, and the Dems say, of course, its Bush's fault. When the FACTS prove otherwise.

If I open Tom's Electric, and I fail, NO ONE will bail me out, its called Capitalism. The game is biting them back, and we're paying for it. I hope the CEO's saved some of their bonuses, I'd be SEIZING it to help pay for this mess.

OK, rant off. Sorry....

[TSB]

The American Dream of home ownership is NOT part of the "Bill of Rights".  It's a privelage, one that comes from hard work and continuous employment!  One that comes from being responsible for ones actions and taking account of ones finances!

When did we become a country of victims? 

T

[Rastus]

I didn't forget the media blitz the last two years of Clinton...it sounded contrived to buy votes for the Dems to me then.  The hue and cry was discrimination and racism.....so certain congressman browbeat the spineless companies that provide loans then when they could slipped in legislation to encourage worthless loans.  Disagree...I don't care them's the facts.

Some of the chickens have come home to roost.  

So...who pays for it...working people.  They steal from you by printing more money...how is that stealing do you ask...well it makes your money worth less.  We're staring at huge taxes or money printing presses....either way "We The People..." are about to take it in the shorts for a privileged few.  That's how governments across the globe have paid for excessive debt...tax increases and/or the printing press.  Either way....

The rest of the chickens are clucking thinking it's time to roost.  

If our fat gets pulled from the fire this time, and I'm hoping it does, we better not waste the chance to fix it.

[ericire12]

Ill just say.... DUH!



Pelosi has been quoted as saying this is entirely Bush's fault. Laughable.