Prescient article from the NYT that should have predicted the economic debacle....

Lucky Luciano

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Wed Oct-01-08 08:58 PM
Original message

Prescient article from the NYT that should have predicted the economic debacle....

Edited on Wed Oct-01-08 09:02 PM by Lucky Luciano

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=1

Septermber 30, 1999

"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. "

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nadinbrzezinski

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Wed Oct-01-08 08:58 PM
Response to Original message

1. After the repeal of glass steegal

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(1000+ posts) Send PM | Profile | Ignore

Wed Oct-01-08 09:31 PM
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2. I don't think so....

unless you meant that it should have foreseen the market putting out designer loans to take advantage of people...if people could pay rent, they can pay reasonable mortgages...period...

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Lucky Luciano

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Wed Oct-01-08 10:12 PM
Response to Reply #2

3. Down Payments were overlooked too....

It is mor than being able to pay rent...it is clearly also about paying down payments...the designer loans were bad too.

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livelongandprosper

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Wed Oct-01-08 10:47 PM
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4. So it went ahead in full steam in 2000.

But this mess didn't start until after the last recession when the Fed lowered interest rates to ridiculous levels and people just lost their sense of reality as result.

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Waiting For Everyman

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Wed Oct-01-08 10:55 PM
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5. Zero down (VA) mortgages have been available since WW2 with no problems.

But there were usury limits too. 7% max. That might've made a difference.

This is racist - blaming the victim, wrongfully I might add. While these banks were reverse-redlining poorer areas, and giving out no-doc loans to anyone at all (drug loans I assume), they were also refusing to refi people with lots of equity and ironclad income for less than 9%... and that's from 2001 until today.

So these people who got their 4% loans, good for you. But don't pat yourself on the back too much, and tell yourself you're so much better or smarter than those who were blackballed. (Well, you can, but you'd be delusional.)

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