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bucheon bum
Joined: 16 Jan 2003
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 Posted: Tue Jan 26, 2010 5:17 pm Post subject: NY Times article from 1999 predicted F. Mae bailout |
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Ny Times article from 1999
When it all began:
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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. |
But before you put the blame on Fannie Mae, there is this important detail:
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| 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. |
And lastly, the prediction:
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| 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. |
If only the rescue was the size of the S&L industry bailouts in the 80s...
edit: fixed link
Last edited by bucheon bum on Wed Jan 27, 2010 8:18 am; edited 1 time in total |
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bacasper
Joined: 26 Mar 2007
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| Posted: Tue Jan 26, 2010 10:32 pm Post subject: Re: NY Times article from 1999 predicted F. Mae bailout |
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Your link doesn't work for me. Does it require a subscription?
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But before you put the blame on Fannie Mae, there is this important detail:
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| 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. |
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Was the original bolding yours? My change gives a different spin, don't you think? |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Wed Jan 27, 2010 8:20 am Post subject: |
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Ok, fixed the link. Should work now.
Original bold was mine. And bacasper, I highlighted the Clinton part simply to note that the financial crisis wasn't just due to the Bush administration, and that its roots began long before then.
Shareholder pressure though, nothing new there.  And makes it even more disgusting that we bailed out Goldman Sachs and other financial institutions that caused the mess. |
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