Back in time with Fannie Mae

From the New York Times' archives, 1999

http://query.nytimes.com/gst/fullpage.html?res=9c0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=1

And from that article, these three chilling paragraphs:

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.

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.''

 

And an even more little-known fact: Clinton was getting a blow job while he was pressuring Fannie Mae.

 

I'll have to take a look at what Wallison recently said to C-span: http://www.c-spanarchives.org/library/index.php?main_page=product_video_info&products_id=281010-1

 

Sounds remarkably prophetic . . . except most of the people who got these bad loans were getting them in 2006-07, not 1999-2000.

I don't think the current crisis is caused by people walking away from houses they bought in 1999, houses that have 9 years of equity and are worth twice as much as the homeowner paid for them (even accounting for the recent plunge in prices).

 

Another swing and miss for Hondo. Put it over the plate, he can't hit it.

 

Excuse me, but it's clear that the process began in 1999. Just because the Bush administration didn't yank the ability of Fannie Mae to issue these kind of ARMs doesn't mean the idea wasn't doomed to begin with. And I don't remember assigning any blame to anything about this. I posted the article (NY Times, remember) because I thought the forecasts of the one expert interviewed were, to say the least, a bit spooky in light of what's happened. Which is to say, exactly what he said would happen.

 

I think you are wrong goalmouth. Hondo's post shows the failed policy during the Clinton administration has come to kick our ass nine years later. The housing crisis was directly tied to banks giving loans to people who had no business getting them. Coincidentally, it didn't happen until the last few years.

 

I'm afraid this is going to kill Bill Clinton's chances of getting elected next month.

 

I'd still vote for him over these douches.

 

One of my favorite guys chimes in:

http://townhall.com/columnists/BrentBozellIII/2008/10/08/saving_liberal_fannies?page=full&comments=true

David Gregory shouldn't be allowed near a story on the economy.

 

Come on Hondo, even stuff that's clearly the Dems' fault is Bush's fault. And if McCain is elected, it will then become his fault. But if Obama is elected, he and his white horse will save the day!

 

I'm not seeing how this is entirely the Dems' fault. After all, both the house and the senate were Republican at the time, couldn't they have done something to stop it then?