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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Thursday, September 08, 2011

Why did Fannie Mae and Freddie Mac get involved in Subprime lending when it was not part of their mandate?

Can anyone say Andrew Cuomo (see below), who was head of HUD late in the Clinton administration where subprime lending became a social policy initiative and Wall Street's butt boy Senator Charles Schumer that used subprime legislative changes to positively impact his big money Wall Street supporters?
July 22, 2007

NEW YORK – Fannie Mae and Freddie Mac are riding to the rescue of the subprime lending market.

The two large housing finance agencies are beefing up their business of guaranteeing subprime loans at a time when slack lending standards and falling home prices have translated into rising delinquencies and foreclosures among subprime borrowers.
From here. So what did the current Governor of New York do that was so bad? According to hard left Village Voice....
There are as many starting points for the mortgage meltdown as there are fears about how far it has yet to go, but one decisive point of departure is the final years of the Clinton administration, when a kid from Queens without any real banking or real-estate experience was the only man in Washington with the power to regulate the giants of home finance, the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC), better known as Fannie Mae and Freddie Mac.

Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why.
From here. The road to destruction is paved with good intentions. But government should never been intervening in housing to start with. And the Clinton administration was terrible in forcing lenders to lend and to actually own mortgages of supposedly needy Black and Hispanic voters.


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