Here we go again... once again this administration is returning to failed liberal policies repackaged as golden solutions in order to save you from a catastrophic Armageddon.
President Obama and Congressional Democrats have turned to using FEAR to scare the public into bad legislation, something this administration accuses the previous of doing and said it wouldn't do, and has relegated itself to lying about the causes of both the housing crisis and subsequent credit and economic crisis. Blaming Bush is soooo 2007
Now we learn that Fannie Mae will loosen credit requirements for home mortgages. For What It’s Worth says "Stop me if you’ve heard this one before."
Fannie Mae will loosen credit requirements for home mortgages. No, that’s not from a five-year-old paper, that’s today’s Bloomberg news.Quote:
Fannie Mae, the mortgage-finance company under U.S. government control, will loosen rules for homeowners seeking to lower their loan payments by refinancing.Fannie Mae will drop some credit-score requirements, reduce income-documentation standards and waive the need for appraisals in some cases, according to a notice yesterday to lenders posted on the Washington-based company’s Web site. The changes apply to loans that the company owns or guarantees.
The company, which accounts for more than 40 percent of the $12 trillion in U.S. residential mortgage debt, is seeking to break a “logjam” in refinancing and allow more homeowners to take advantage of near-record low interest rates, according toBrian Faith, a Fannie Mae spokesman. The increased flexibility for consumers isn’t large enough to significantly harm mortgage- bond investors and mortgage insurers, analysts said.
I emphasized a part of the article I think is critical, having worked the better part of the last decade in the mortgage industry, I'm completely floored reading this, as income-documentation standards or what we call "stated income" is the leading cause of foreclosures. Lenders took undocumented income or "stated income" high risk loans because GSE's (Freddy and Fannie) 1. told them to and said the government would guarantee them and 2. bought most of them. I'm sorry but a pool man and grocery clerk don't make $15,000.00 a month!!!
Although the charge of racism was behind the last loosening of credit requirements and this time it seems to be to help us out of a jam the end results will be the same. All the GSE's like Freddy and Fannie should have been scraped years ago. Allowing a private-government-hybrid company that guarantee's loans is the reason we're in the mess to start with and until we recognize and correct that we're doomed to repeat this crisis over and over.
This video should be watched every time this issue comes up!