axiom.c
Playing Devils Advocate with Democrats
(predicting the credit crisis in 1999)
Author → Asif → in U.S-News → on Oct 1 2008 10:14AM
Tags:
credit crisis
clinton administration
Well, fast forward 9 years and we all know how all of that increasing pressure from the Clinton Administration worked. It's truly amazing and make no doubt that the various financial, political parties all knew the risks involved. These are institutions that have some of the best minds working for them and in the end they gambled. Gambled with peoples lives, savings, and economic stability. They thought that due to their positions and the institutions they built that somehow it was indefatigable, but I do believe in a higher power and that one day here or in the next, all will be accountable for his/her actions.
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.
....In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.
.....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.
NY Times).
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