Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: Thursday, September 30, 1999

You really need to read the whole article but a few excerpts.

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.

Wow, who could have predicted that could turn out badly? Well I guess the NY Times did.

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.

The rest of the article is available here.

Certainly can’t say that we were not warned. And just in case you were wondering, who is to blame for our current woes?

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.

Somehow I doubt we have learned the lesson of our mistakes.

Join the forum discussion on this post - (1) Posts

Lawmakers have a plethora of proposals to raise the hundreds of billions estimated to be needed for an overhaul, including new taxes on soda, beer, and wine, and a partial tax on employer-provided health insurance for the first time. The tax-free nature of employer-provided insurance is the biggest tax expenditure in the federal budget.

So do I read that correctly, tax free employer-provided insurance is considered not only a tax expenditure but the biggest tax expenditure in the federal budget?  So any unclaimed opportunity to tax is considered by the democrats as a “tax expenditure”?  Does that also mean when they start taxing our employeer-provided insurance that it was be considered a tax expenditure reduction?

Join the forum discussion on this post - (1) Posts

The recession is driving the safety net of government benefits to a historic high, as one of every six dollars of Americans’ income is now coming in the form of a federal or state check or voucher.

Benefits, such as Social Security, food stamps, unemployment insurance and health care, accounted for 16.2% of personal income in the first quarter of 2009

I knew that government assistance was way out of hand but this number put a huge exclaimation point on how bad it has become.  Where are all those dollars coming from?  The story continued,

In all, government spending on benefits will top $2 trillion in 2009 — an average of $17,000 provided to each U.S. household, federal data show.

Average of $17,000 per household!  Where are we spending all this money?  The story explains how cost have increase almost 20% in the first quarter of 2009 alone.

What’s driving the $209 billion increase in benefit costs from a year ago:

•Unemployment insurance. One-fourth of the extra spending covers jobless benefits, a program started in the Depression. The stimulus law, passed in February, increased benefits.

• Social Security. The bad economy has prompted a 10%-15% jump in early retirements, the program’s actuary says. A 5.8% increase took effect January 1. Bottom line: $55 billion in new costs.

• Food stamps. Enrollment hit a record 33.2 million people in March, up 5.2 million from last year. The stimulus law boosted the size of the benefit. Average March benefit: $114 per person.

Please notice that when times are hard, and more Americans need help than any other time in recent memory, do we tighten our belts to get out country through the tough times?  No, across the board we INCREASE BENEFITS!

One of every six dollars of income.  An average of $17,000 per household and we are increasing benefits.  And this is pre-Universal Healthcare.  What will it be then, one in every five?  One in every four?

I don’t get it.  Huge numbers of Americans are unemployed, they aren’t paying taxes, there is almost no manufacturing base left in this country to build on and tax revenues are dropping fast than Bill Clinton’s pants in the Oval Office and we are across the board INCREASING BENEFITS.

At least the last two lines in the article shows that someone “gets it”.

Adam Lerrick, economist at the conservative American Enterprise Institute, says the benefits’ explosion will eventually lead to an economic crisis.

“We’ve seen this movie before in many countries. It always has the same ending,” he says.

Our arrogance is leading us down a path of destruction and it may be too late to turn back.  Read that last line again, “It always has the same ending”.  Our ending is total implosion of the US economy and I’m afraid we are getting closer than anyone is willing to admit.  China sees it, Russia sees it, will we wake up and see it before it is too late?

Don’t take my word for it, Monty’s nobody, take 10 minutes, click on the link below and read what the President and Chief Executive Officer or the Federal Reserve Bank of Dallas has to say on “the frightful storm of unfunded long-term liabilities” of our government.

Storms on the Horizon by Richard W. Fisher

Join the forum discussion on this post - (1) Posts