Bailout did not pass in the House!

Just called my local bank and asked if they had a problem with loaning me money for a house or car loan.

The answer was "absolutely not"!!!

The problem seems to be one that is not on mainstreet, I am sorry about Wallstreet;but,it would seem that some of the Congress-critters have listened to the folks back home!

Gary K.

Listening to Lou Dobbs now - he couldn't be happier! I'm happy myself - yeah, Congress FINALLY stood up for the American public!

And hear me now - my own congressman, Barnie Frank will NOT NOT NOT, get my vote - EVER! He's one of the reasons why we're in this mess!

Chin up gkayser - you'll get a loan - not so soon but you'll get one.

Your friend,

Varla,

You read his post wrong. The bank said there was no problem with him getting a loan.

Politicians have been telling us that banks won't loan out money. I guess they haven't heard that's how banks make their money.

"My banker said 'absolutely no problem with making loans', the credit is out there."

This was just a question for me, my home loan is decades old.

The problem goes back as far as Carter.

quote:

Originally posted by squeezer:
Varla,

You read his post wrong. The bank said there was no problem with him getting a loan.

Politicians have been telling us that banks won't loan out money. I guess they haven't heard that's how banks make their money.

HaHa -

I got one eye reading this board and the other on the news! Multitasking is not exactly one of my best skills!

I watch Lou Dobbs and out of all news people, he was thrilled that congress didn't approve. I've heard that the credit will be available but not too soon. My biggest issues with this bill was that too much power was given to the Treasury Sec (Bernake?) and the CEO's of all the failed banks should get, NADA! Furthermore - the ratings agencies - Moody's, Standard & Poor's - they need to be investigated as well. They were giving good ratings to all these banks - what were they thinking?

I wouldn't be surprised if this problem started before Carter.....don't really know, just a thought.

Thanks,

quote:

Originally posted by varla_pussycat:

I wouldn't be surprised if this problem started before Carter.....don't really know, just a thought.

I think the Carter reference has to do with something that was passed during his presidency. I think it's similar to what caused today's problems.

I was at the car dealership yesterday getting an oil change (and free wipers). They have a big sale going on right now. I forgot to ask them why they're having a sale if nobody can get a loan. LOL

Got this in an email today.

What else is new? How many others wrote about this?.





Business/Financial Desk; Section C

Fannie Mae Eases Credit To Aid Mortgage Lending

By STEVEN A. HOLMES

831 words

30 September 1999

The New York Times

Page 2, Column 5

English

(c) 1999 New York Times Company

WASHINGTON, Sept. 29 -- 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. Fannie Mae officials say they hope to make it a nationwide program by next spring. 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. 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. ''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.'' Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

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. ''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent. In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent. Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings. In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups. The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.



-END OF STORY-

quote:

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.

And that, my friends, is why the banks got greedy! Thanks to the Democrats!