In 1999: Clinton pressures Fannie Mae: Ease Credit To Aid Mortgage Lending State, National, International, posted by Ralphie, a resident of the Canyon Oaks neighborhood, on Feb 18, 2009 at 1:22 pm
In 1999, under pressure from the Clinton administration, Fannie Mae, the nation's largest home mortgage underwriter, relaxed credit requirements on the loans it would purchase from other banks and lenders, hoping that easing these restrictions would result in increased loan availability for minority and low-income buyers. Putting pressure on the GSE's (Government Sponsored Enterprise) Fannie Mae and Freddie Mac, the Clinton administration looked to increase their sub-prime portfolios, including the Department of Housing and Urban Development expressing its interest in the GSE's maintaining a 50% portion of their portfolios in loans to low and moderate-income borrowers.
CHILLING WORDS FROM TEN YEARS AGO:
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.''
Posted by frank, a resident of the Pleasanton Heights neighborhood, on Feb 18, 2009 at 8:00 pm
Of course, our powerful free enterprise financial system, no-government-oversight, trickle-down-theory-put-in-practice, shareholders-watching-the-management, Alan Greenspan-dominated-financial-hand-on-the-tiller, Bush-controlled and Republican-controlled management of financial policy, system was completely and utterly undone by Clinton and Fannie Mae in 1999. What a great and powerful and sturdy system they gave us! A breath of ill wind sends us into the next great depression! What a strong, powerful economic ideology we have lived under since Reagan. Vote Republican!!!!
The Republican attack machine continues to live in the blogs of the PW.
Posted by Jerry, a resident of the Oak Hill neighborhood, on Feb 19, 2009 at 1:49 am
News tonight said the Feds are pouring funds from the "package" into Freddie and Fannie to be spread among those that are about to be foreclosed and those having trouble making their mortgage payments...
In my opinion, just handing buckets to a sinking oceanliner. If one can't make the payments without help now, what happens when the pot runs dry...
Wasn't Freddie and Fannie a large contributor to the current "crisis".
Posted by Rick, a resident of the Another Pleasanton neighborhood neighborhood, on Feb 19, 2009 at 10:05 am
Look, this whole problem has been caused by both Democrats and Republicans thinking otherwise is just being biased. If Greenspan was still head of the FED we would probably be alot better off. Don't believe the press, Greenspan handled ever other problem during is tenure as Fed chief. A Berkeley economist.
Posted by Rick, a resident of the Another Pleasanton neighborhood neighborhood, on Feb 20, 2009 at 11:23 am
Yes Greenspan did admit he didn't understand how bad the mortgage mess was going to be but he could still fix it better than the clowns that are working on it now in Bush's or Obama's administration. Bernanke is clueless.
Posted by frank, a resident of the Pleasanton Heights neighborhood, on Feb 20, 2009 at 10:13 pm
History will show Greenspan was the biggest jerk in the whole debacle. This disciple of Milton Friedman will become the central historical figure who was the key implementor of the ideology that produced the Second Great Depression. Reagan and the two Bush's, along with Clinton, will be his accomplices.