Fannie Mae (FNMA)

[955]

This Washington Examiner article doesn't tell the whole story as told in the FCIC (Financial Crisis Inquiry Commission) Report. Fannie Mae was FORCED into purchasing sub-prime mortgages by HUD. These mandated quotas, which were known as Affordable Housing Goals, were as high as 56% during the Bush Administration.

Correctly restated,

HUD was a leading advocate of the loose-lending policies that led to the Great Recession of 2008. Thanks to its implicit government guarantee, HUD aggressively promoted the sub-prime mortgages that resulted, especially in its relationship with the now-bankrupt Countrywide Financial.

From FCIC Report p.453-454:

The GSE Act, however, created a new “mission” for Fannie Mae and Freddie
Mac—a responsibility to support affordable housing—and authorized HUD to
establish and administer what was in effect a mortgage quota system in which a
certain percentage of all Fannie and Freddie mortgage purchases had to be loans to
low-and- moderate income (LMI) borrowers—defined as persons with income at or
below the median income in a particular area or to borrowers living in certain low
income communities. The AH goals put Fannie and Freddie into direct competition
with the FHA, which was then and is today an agency within HUD that functions as
the federal government’s principal subprime lender.

Over the next 15 years, HUD consistently enhanced and enlarged the AH
goals. In the GSE Act, Congress had initially specified that 30 percent of the GSEs’
mortgage purchases meet the AH goals. This was increased to 42 percent in 1995,
and 50 percent in 2000. By 2008, the main LMI goal was 56 percent, and a special
affordable subgoal had been added requiring that 27 percent of the loans acquired
by the GSEs be made to borrowers who were at or below 80 percent of area median
income (AMI). Table 10, page 510, shows that Fannie and Freddie met the goals in
almost every year between 1996 and 2008.

https://www.gpo.gov/fdsys/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf

The MSM consistently ignores these facts time and time again!



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