Thread:

2004: Democrats Say Freddie/Fannie have NO RISK!!!

While the Dems are trying to blame everyone but themselves, here is a video from 2004 of the DEMOCRAT's reaction to the republicans wanting more oversite. The Dems say it is not needed and there is NO RISK to the tax payers and the loans are fine.

Might as well add this little blast from the past.

Originally Posted by New York Times 1999
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.

Originally Posted by HM

While the Dems are trying to blame everyone but themselves, here is a video from 2004 of the DEMOCRAT's reaction to the republicans wanting more oversite. The Dems say it is not needed and there is NO RISK to the tax payers and the loans are fine.

Good find Frank. However, we both know that there is more than one party to blame for this mess. I'm of the belief that figuring out how to pick up the pieces is more important than pointing fingers at least for now. And let's not forget who has led the crusade to pump 700 billion into the failing economy.

Originally Posted by Old Texan

Maxine Waters says "Franklin Raines is an honest man helping the people....."

More like helping himself to all the money.

A quick bailout plan favors the dems at this point. It will help Obama, but most importantly it will help cover alot of the misdeeds and by whom in the past. The media has done a very good job so far keeping the information about who has been running Freddie Mac and Freddie May and their affiliations.

Originally Posted by redneckcharlie

A quick bailout plan favors the dems at this point. It will help Obama, but most importantly it will help cover alot of the misdeeds and by whom in the past. The media has done a very good job so far keeping the information about who has been running Freddie Mac and Freddie May and their affiliations.

If this is the case then why are Bush and McCain pushing so hard for he bailout?

Originally Posted by pb123

Because its serious and China is waiting in the Wings.......

Screw China, they can kiss my ass.

One day, hopefully before its too late, everyone will figure out that saving a buck or two on a pos imported (insert product here) isn't really saving anything in the long run. In the long run we're making these countries wealthy and strong and in the end hurting ourselves more than we realize.

Originally Posted by pb123

I don't know how people can trust the same people that screwed them over and over and over...

Thats why I don't trust either party. If you think the Republician party is looking out for your best interests, take another hit..................
All they are concerned with is doing the deeds of the rich that fill thier campaign funds..................