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Replies to post #201640 on Fannie Mae-No Politics (FNMA)
Oh, I see.
Don't forget that HUD also increased F&F's requirement to buy sub-prime loans in 2004 because "they were falling behind the private lenders" (paraphrasing). I don't think that hurt F&F much, comparatively, because even the sub-prime loans F&F backed looked like AAA prime compared to the stinking liar loans coming from the likes of WaMu.
Quote:
HUD, under collusion between government and banks to take down F&F, places FHA & F&F in direct competition with each other, banks with assistance of credit rating agencies (Moody's et al) flood housing market with bad NTM's,
Under the GSE Act, the HUD Secretary was authorized to establish affordable
housing goals for Fannie and Freddie. Congress required that these goals include a
low and moderate income goal and a special affordable goal (discussed below), both
of which could be adjusted in the future. Among the factors the secretary was to
consider in establishing the goals were national housing needs and “the ability of
the enterprises [Fannie and Freddie] to lead the industry in making mortgage credit
available for low-and moderate-income families.” The Act also established an interim
affordable housing goal of 30 percent for the two-year period beginning January 1,
1993. Under this requirement, 30 percent of the GSEs’ mortgage purchases had to
be affordable housing loans, defined as loans to borrowers at or below the AMI [Area Median Income].
Further, the Act established a “special affordable” goal to meet the
“unaddressed needs of, and affordable to, low-income families in low-income
areas and very low-income families.” This category was defined as follows: “(i) 45
percent shall be mortgages of low-income families who live in census tracts in which
the median income does not exceed 80 percent of the area median income; and
(ii) 55 percent shall be mortgages of very low income families,” which were later
defined as 60 percent of AMI. Although the GSE Act initially required that the
GSEs spend on special affordable mortgages “not less than 1 percent of the dollar
amount of the mortgage purchases by the [GSEs] for the previous year,” HUD raised
this requirement substantially in later years. Ultimately, it became the most difficult
affordable housing AH burden for Fannie and Freddie to meet.
Oh, I see.
Don't forget that HUD also increased F&F's requirement to buy sub-prime loans in 2004 because "they were falling behind the private lenders" (paraphrasing). I don't think that hurt F&F much, comparatively, because even the sub-prime loans F&F backed looked like AAA prime compared to the stinking liar loans coming from the likes of WaMu.
Quote:
HUD, under collusion between government and banks to take down F&F, places FHA & F&F in direct competition with each other, banks with assistance of credit rating agencies (Moody's et al) flood housing market with bad NTM's,
We conclude the failures of credit rating agencies were essential cogs in the
wheel of financial destruction. The three credit rating agencies were key enablers of
the financial meltdown. The mortgage-related securities at the heart of the crisis
could not have been marketed and sold without their seal of approval. Investors relied on them, often blindly. In some cases, they were obligated to use them, or regulatory capital standards were hinged on them. This crisis could not have happened
without the rating agencies. Their ratings helped the market soar and their downgrades through 2007 and 2008 wreaked havoc across markets and firms.
In our report, you will read about the breakdowns at Moody’s, examined by the
Commission as a case study. From 2000 to 2007, Moody’s rated nearly 45,000
mortgage-related securities as triple-A. This compares with six private-sector companies in the United States that carried this coveted rating in early 2010. In 2006
alone, Moody’s put its triple-A stamp of approval on 30 mortgage-related securities
every working day. The results were disastrous: 83% of the mortgage securities rated
triple-A that year ultimately were downgraded.
You will also read about the forces at work behind the breakdowns at Moody’s, including the flawed computer models, the pressure from financial firms that paid for
the ratings, the relentless drive for market share, the lack of resources to do the job
despite record profits, and the absence of meaningful public oversight. And you will
see that without the active participation of the rating agencies, the market for mortgage-related securities could not have been what it became.
Oh, I see.
Don't forget that HUD also increased F&F's requirement to buy sub-prime loans in 2004 because "they were falling behind the private lenders" (paraphrasing). I don't think that hurt F&F much, comparatively, because even the sub-prime loans F&F backed looked like AAA prime compared to the stinking liar loans coming from the likes of WaMu.
Quote:
HUD, under collusion between government and banks to take down F&F, places FHA & F&F in direct competition with each other, banks with assistance of credit rating agencies (Moody's et al) flood housing market with bad NTM's,
AI
