Oh crap!!! Here we go again!!

[RickN]

Don't these idiots ever learn? If they can not afford to pay the loan back, they should not be given one because the tax payer sure as hell can not afford to keep covering them.

Frannie, Freddie to Ease Credit Requirements

Fannie Mae and Freddie Mac are working with housing regulators and mortgage lenders to ease credit for many consumers who have been shut out of the home buying market due to tighter credit requirements initiated in the wake of the 2008 financial crisis.

Details of an agreement between the two quasi-government mortgage-servicing giants and the banks will be announced today in a speech by Federal Housing Finance Agency Mell Watt. The FHFA is the U.S. regulatory agency that oversees Fannie Mae and Freddie Mac.

The Wall Street Journal reported last week Fannie Mae, Freddie Mac and mortgage lenders were nearing an agreement to lower barriers and restrictions on borrowers with weak credit in an effort to expand access to home loans and lift home sales. Expanding access to home loans could ultimately provide a jump start to the vital housing sector, benefiting the ancillary lending, construction and retail sectors.

By working closely with regulators to approve new credit structures, Fannie Mae and Freddie Mac hope to insulate themselves from accusations they approved loans that shouldn’t have been approved to consumers with lousy credit histories.

In the aftermath of the 2008 financial crisis, which stemmed directly from the collapse of the U.S. housing market as millions of Americans defaulted on their home loans, Fannie Mae and Freddie Mac were accused of easing credit in order to promote loans and boost their own profits.

Many private lenders were accused of the same thing.

Fannie and Freddie are now considering programs that would make it easier for lenders to offer mortgages with down payments of as little as 3% for some borrowers, the Wall Street Journal reported.

Since housing bubble burst, sending the U.S. into a deep recession, lenders have been enforcing far tighter credit standards, making it difficult for many first-time home buyers to scrape together a down payment and qualify for a mortgage.

Consequently, despite historically low interest rates that have brought mortgage rates to their lowest levels in decades, many consumers haven’t been able to take advantage of the low rates and the U.S. housing market has struggled to gain traction as the economic recovery slowly moves forward.

Fannie and Freddie found themselves on the verge of collapse at the height of the financial crisis and were taken over by the government in 2008. They remain in conservatorship.

Congress has been fighting over whether to reform the existing agencies or scrap them altogether. Earlier this year, a bipartisan Senate plan to replace Fannie and Freddie as part of a broader housing-finance overhaul stalled.

 

[Surveyor1653]

Stop being so racist. It's for the children... and puppies...and little baby seals. This can only mean good things for our economy and way of life. Besides, in this holiest of seasons, we must pander and be inclusive so that others might benefit and vote. Amen.

 

[gerhard1]

I was speaking to a couple of ardent Obamites and mentioned that the Democrats creating sub-prime adjustable rate mortgages was a lot of what caused the collapse of the housing market, as the triggers to adjust the rate upward kicked in and the payments went up and the borrowers could not make the payments.

They told me that the borrowers still had the house as collateral so the banks should have made the terms more favorable. What they did not consider, largely because they did not want to was that borrowers have to qualify for more favorable terms.

As the number of foreclosures increased, the number of houses on the market rapidly increased, and this increase in supply and and much lower demand, lowered housing prices across the board throwing construction out of work causing a ripple that resulted in the situation that we are in today.

 

[Wheel Gun]

It's all about risk. When the government is willing to accept all the risk in these purchases, silly things happen. Silly things that harm all of us.

 

[ChuckC]

But doesn't everybody have the right to own a home? sarcasm

 

[RidgeHunter]

uncle slayton's got his texan pride
back in the thickets with his asian bride
he's cut that corner pasture into acre lots
sells 'em owner financed
strictly to them that's got no kind of credit
'cause he knows they're slackers
and they'll miss that payment and he takes it back

 

[CHenry]

The banks were not only accused of writing bad loans, they admitted to doing to. They were told to (by whom?).
I refied and took the low interest only loans for a 5 year term and took advantage as to pay off about $40k of the principle and then at the 4 year mark I refied again back to a fixed rate conventional loan. I was one of few that did this to my advantage. My house will be paid off before I turn 47 if nothing bad comes along.

 

[TedKennedy]

When we first started "house shopping", the realtor tried to get us to shop in price range double what we stated we wanted. Yes, we would qualify for that amount, no it would be living above our means to do so.
I've seen so many of these "victims" of foreclosure that simply made poor choices, and bit off more than they could chew. The banksters were happy to loan them money, and now we know why.

 

[Oklahomabassin]

Title could be a little descriptive of what is in the post.

 

[RidgeHunter]

But doesn't everybody have the right to own a home? sarcasm

Just as the banks have the right to make bad loans. It's what they call a mutually beneficial relationship. Like a whore and a John. One gets screwed, the other gets off.