Tuesday, February 24

Ten Years Ago

This piece from the September 30, 1999 issue of the New York Times tells about a program initiated by Fannie Mae to "help increase home ownership rates among minorities and low-income consumers." And how would this program increase home ownership? Ah, it was a brilliant plan - brilliant I tell you:
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.
To be honest, they didn't do it our of pure altruism; there was some "pressure" applied by various parties also deeply interested in the welfare of minorities and low-income consumers.
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.
But hey, they were just doing it for the children, weren't they? And how did they propose to help those minorities and low-income consumers? With a plan that was a brilliant as it was daring: they would loan money to people who couldn't repay it!
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.
I just feel a warm glow all over knowing that the government cares so much about minorities and low-income consumers, don't you?

And now, after the government has done so much to help, they are going to do even more!

Oh, I am flushed with giddy anticipation at the wonders our Glorious Leaders have planned for us poor minorities and/or low-income consumers ten years from now. I mean, who could have guessed ten years ago that these programs would be so stunningly successful? The sourpuss who wrote this piece did mention a wee tiny dark cloud on the horizon, a cloud no darker than a man's hand, one might say:
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.
Good intentions are really all that matters, and no one but no one has more good intentions than Our American Government.

Call your Congresscritter. Make their lives as miserable as they have made yours.

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