I thought others might find this NYT article from 1999 interesting. A few highlights:
NYT said: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.
NYT said: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.
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I've been reading editorials that allude to this easing of credit restrictions under the Clinton administration, but it's always interesting to open up the time capsule and find out for sure.
I'd blame American Dream of a home with a picket fence Two decades of presidents pushing for more home ownership every which way didn't help any either.
walletfart said:Excellent find, almost sounds like it was written today and backdated to 1999. Talk about great ammo for the Republicans to dig up.
It'll go back to throwing stones from a glass house There is a nice GWB quote in one of the earlier threads urging/demanding more Americans to own homes.
walletfart said:Excellent find, almost sounds like it was written today and backdated to 1999. Talk about great ammo for the Republicans to dig up.
"I believe owning a home is an essential part of economic security.
We are here in Washington, D.C. to address problems. So I've set this goal for the country. We want 5.5 million more homeowners by 2010.
And so what are the barriers that we can deal with here in Washington? Well, probably the single barrier to first-time homeownership is high down payments. People take a look at the down payment, they say that's too high, I'm not buying. They may have the desire to buy, but they don't have the wherewithal to handle the down payment. We can deal with that. And so I've asked Congress to fully fund an American Dream down payment fund which will help a low-income family to qualify to buy, to buy. (Applause.)
We believe when this fund is fully funded and properly administered, which it will be under the Bush administration, that over 40,000 families a year -- 40,000 families a year -- will be able to realize the dream we want them to be able to realize, and that's owning their own home. (Applause.)"
McCain sponsored a bill in 2005 that would have averted this crisis by tightening standards at Freddie and Fannie. The Democrats voted as a block against it:
Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation.
walletfart said:Excellent find, almost sounds like it was written today and backdated to 1999. Talk about great ammo for the Republicans to dig up.Great ammo for the Republicans, if you want to show that in the eight years following, their president/party did nothing to change the policy -- only expand it even further.
RushnRockt said:I'd blame American Dream of a home with a picket fence Two decades of presidents pushing for more home ownership every which way didn't help any either. Amen to that. back in 2005 in my first year in job, my collegues loughed at me as I told them that I do nto have enough money to buy a house. Their point was, "we are buying house to make money". Hope they have enough now to live in a decent apartment.
From the same article "The action, which will begin as a pilot program involving 24 banks in 15 markets".
so whom to blame? I think neither Dems nor Reps are not the one to blame. It is the under writers themselves. Since it was a pilot program they could have scrapped it well before they got in to the mud.
jaimelobo said:walletfart said:Excellent find, almost sounds like it was written today and backdated to 1999. Talk about great ammo for the Republicans to dig up.Great ammo for the Republicans, if you want to show that in the eight years following, their president/party did nothing to change the policy -- only expand it even further.
I agree, both parties are to blame. However, this is the oldest/hardest evidence of a "root cause" that I've seen posted. My comment is that if they wanted to, the Reps could post this on their side.
... until one of you digs up something older with HW
Good find. The writing's been on the wall for almost a decade.
There are a lot of people who've been in position to do something about it during all those years who've been asleep at the wheel. Or worse than asleep at the wheel, accomplice of the whole debacle when they promoted more excesses (bargain low interest rates fro years, ARMania, 0 down payment, etc.) rather than acknowledging that it was a train wreck waiting to happen. It's hard to believe that some lenders, Feds, or government officials still have the nerve of claiming having been blindsided by the phenomena when the risks were clear back almost 10 years ago.
I give the post green for bringing the point to our attention.
However, I'd be willing to bet that there are at least 50+ NYT articles where a doomsday prohetic message was conveyed and nothing near doomsday happened.
jaimelobo said:walletfart said:Excellent find, almost sounds like it was written today and backdated to 1999. Talk about great ammo for the Republicans to dig up.Great ammo for the Republicans, if you want to show that in the eight years following, their president/party did nothing to change the policy -- only expand it even further.I hate that people on either side would try to use it as ammo. Can't we all just agree that pretty much everybody screwed up?
sensia said: Amen to that. back in 2005 in my first year in job, my collegues loughed at me as I told them that I do nto have enough money to buy a house. Their point was, "we are buying house to make money". Hope they have enough now to live in a decent apartment.
Don't worry. The next iteration of the bailout bill will include more "homeowner protections" to help them pay for their homes with your money, while you still live in a rented apartment. Isn't Communism wonderful?
Edit: Technologist correctly pointed out that taxing me to buy some irresponsible dolt a house is called Socialism. If the government were to tax me to buy and operate a business, like AIG insurance, then that would be called Communism.
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Two decades of presidents pushing for more home ownership every which way didn't help any either.
