Wall Streeters are just Welfare Recipients, in Disguise they just cost more to feed is all.
They are the Rich Welfare bums who need it the least.
Exactly 9 Years Ago Today: Fannie Mae Eases Credit To Aid Mortgage Lending
Lest we forget. History can say a lot.
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
September 30, 1999
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.
Compliments of One Mans Blog
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.
This means they made a small fortune on the poor for some time. Why is it the poor have to pay more interest? That one percent certainly adds up to a whole lot of profit.
There certainly are those who know how to make money off a stock market crash.
During the Great Depression there were those who made a fortune. Seems the as usual the rich got richer and the poor got very much poorer.
There are those who know very well how to create a crisis and profit from it. I see a pattern emerging.
One does have to wonder (in spite of all the legislation that has been passed over the years) how it is still possible this can happen.
Seems our law makers never really get it right. It could be they really don’t actually do anything to prevent it. Could be they just pretend to fix it.
People become confident things will be OK. They start investing again, until the next crash comes along. Then we all just repeat the same scenario over again. Maybe it’s just me. But I see the wool being pulled over everyone’s eyes yet again.
They mess up and the Government Bails them out. So where is the accountability. Seems anyone in American messes up and Government is there to bail them out. They can be as irresponsible as they want. NO FEAR the Government will give them YOUR MONEY. Meanwhile back at the ranch there are millions living in poverty and many are ending up on the streets every day.
Isn’t that comforting? Yes your Government is taking care of you?
Wall Street bailout: Report from the front
This is almost amusing Poor Suffering Wall Streeters BOY does my heart go out them and all the suffering they have caused. The poor, pathtic, lost souls, that they are.
October 11, 2008
Lehman Brothers Holdings Inc. Chief Executive Richard S. Fuld Jr., wearing tie, is heckled by protesters as he leaves Capitol Hill in Washington after testify before the House Oversight and Government Reform Committee.
AP / Susan Walsh
I don’t fully understand how the $700-billion we are all donating to rescue Wall Street’s executives will be deployed, but I assume it will become clear in a few weeks when we are likely to see a report from the front along these lines: Hundreds of security personnel, some in riot gear, kept order at Congress’ much-anticipated bailout distribution site today on Wall Street. Earlier, dozens of relief trucks loaded with sacks of cash intended for needy financial executives had lumbered through the streets of lower Manhattan before dawn. An estimated 70,000 CEOs, CFOs, COOs, VPs and hedge fund managers hit hardest by the collapse of the credit markets will receive $10 million each in taxpayer money. By 7 a.m., they clogged Wall Street wearing tags issued by their former companies and the crowd was a sea of names like Freddie, Fannie, Lehman, AIG, Washington Mutual, Bear Sterns and Merrill Lynch. Congress had hired emergency-distribution veteran Oxfam International to oversee the operation. Oxfam’s spokesman Jack Rowley said that in the past weeks, needy recipients awaiting the relief drop have been housed in appropriate Manhattan hotels commandeered by the government as holding “camps.” The hotel/camps were chosen in the hopes the executives would be used to the routine, but authorities said conditions had become difficult, with Wall Streeters in some cases forced to share rooms ( try living like poor Americans on the Streets then Whine Boys) at the The Palace, the Four Seasons, The Ritz and the St. Regis. “The hygiene situation is appalling,” said Oxfam’s Rowley, “with the men’s locker-rooms attached to the day spas running out of Clubman aftershave, Armani cologne and Cartier eau de toilette.” ( try living like poor Americans on the Streets then Whine Boys) Rowley said food was also becoming a problem, and his people were putting out an emergency call to restaurants to donate more beef tartare, Dover sole, seared Hudson Valley fois gras, pistachio crusted filet au poivre and wild boar tagliatelle carbonado. ( try living like poor Americans on the Streets then Whine Boys) The denizens of Wall Street, though still among the world’s richest citizens, have been in crisis ever since they bet everything on shaky subprime mortgages , which then predictably collapsed. One executive, who insisted on anonymity, said it is unfair to point the finger of blame at Wall Street. “The middle class let us down,” he told reporters. “We tried to help these $40,000-a-year people by talking them into $3,000-a-month mortgages, which we could bundle into huge hedge investments, and what happens? Two years later they default into foreclosure, cratering our lucrative mortgage-backed securities. I guess that’s gratitude for you.” (OH they were so generous the kindness, the kindness and who are they tring to kid they did it for “profit”.). Congress cut costs at the distribution site by canceling the need for thousands of National Guard members. Instead, in a show of “solidarity with the American needy,” security was provided by a “coalition of the willing,” from such sympathetic states as Switzerland, Macau, Liechtenstein, Barbados, Monaco and the Cayman Islands. Although clad in riot gear, the security personnel also carried folders bulging with deposit slips from their local banks, offering the bailout recipients tax-free havens for their money. Authorities said preparatory operations had gone well, with C-130 cargo planes usually used by USAid to deliver rice to Third World disaster spots having landed at JFK at 2 a.m. They carried the first $70 billion of the $700-billion bailout fund. Waiting trucks were soon in position in lower Manhattan. At exactly 10 a.m., the Oxfam staff opened the truck cargo doors to reveal thousands of sacks bearing the stamp, “Gift to Wall Street from Main Street.” Instantly, the crowd surged forward. Men in Armani Collezioni charcoal 3-button suits with Salvatore Ferragamo belts jockeyed for position next to women in Mariella Burani black crepe blazers with drapped detailing matched with Gucci classic heels. Among them were the CEO’s of Fannie Mae (Daniel H Mudd From Fannie Mae makes 8.79 million a year and owns 18.3 million in shares) and Freddie Mac (Richard F Syron From Freddie Mac makes 3.40 million a year and owns 20.0 million in shares) — who will likely walk away from their companies with over $25 million each, as well as ex Lehman Brothers CEO Dick Fuld, (Better known as Richard S Fuld Jr From Lehman Bros Holdings made 71.90 million a year and owns $436.8 million in shares).who got $480 million over the years in pay packages.
They all said they appreciated taxpayers helping them out now that they’re out of jobs. (MY Interpretation of this statement, “Thanking the all day suckers, you the tax payer that is”).
Peacekeepers with bullhorns shouted for calm. Several reporters saw officers with tear gas guns tense up as the crowd began to chant, “Show us the money. . . .” International observers were concerned. “If we don’t get this finished in the next week, the situation will become acute,” said Oxfam veteran Gustav Yves-Pierre. “The risk of money riots is imminent.” He pointed out that many recipients were in arrears on yacht payments and club dues.
One man, Pierre said, told him he feared that if he could not follow through on a $100,000 pledge to the Yale capital campaign, his son would not be accepted early admission, and perhaps not at all, which would interrupt his family’s four-generation membership in Skull and Bones. “That’s why I’m here,” said Yves-Pierre. “Whether it’s the starving in Ethiopia or this, a human being can’t look away when tragedy is unfolding.” Those on the trucks worked feverishly, handing out 110-pound (50-kg) bags of cash, each containing $10 million. As money managers, recipients are expected to invest it and live off the interest, but officials were concerned that with yield rates on treasuries and bonds so low, the $10 million won’t generate enough, and Wall Streeters will have to dip into their new principal to pay for such essentials as Sothebys auctions, Tuscan vacations and caretaking for their Aspen ski houses. Many of those in line found it difficult to wait for hours in the sun and some, on the point of collapse, retreated to their BMWs, and idled with the air conditioning on. As predicted, there was only enough for 10 percent of those in line. It was a poignant sight as tens of thousands headed empty-handed back to their hotel-camps while the luckier recipients struggled to their cars balancing the heavy sacks on their heads. Some relief workers wept openly at the heartbreak. Source
Year of the Bailout
Want a federal bailout? Get in line. Now that the Treasury Department has finally announced its rescue of mortgage giants Fannie Mae and Freddie Mac—at a cost of up to $100 billion each—isn’t it time to start tallying up all this largesse? A hundred billion here, a hundred billion there, maybe it doesn’t seem like much at first. But before you know it, you’ve drained the treasury of the world’s richest country. And besides, more rescues seem to be coming. Here’s a tally of the bailouts so far:
The stimulus package. Maximum taxpayer cost: $150 billion What taxpayers got: Free money, up to $1,200 from the government per household, to spend as they wish. Early research shows most recipients have used the money to pay down debts or boost their savings. Good for them, but bad for the economy, which benefits most in the short-term from spending, not saving.
Bear Stearns. Maximum taxpayer cost: $29 billion. What taxpayers got: Prevented an even worse meltdown in the financial markets—at least for a while.
Fannie Mae and Freddie Mac. Maximum taxpayer cost: $200 billion. What taxpayers get: The mortgage market won’t completely collapse. Interest rates may even drop a little and credit gets a bit easier.
IndyMac and 10 other banks. These insolvent banks had billions in deposits that were taken over by the Federal Deposit Insurance Corp. Taxpayers won’t foot the bill directly, because FDIC takeovers are funded by insurance that banks pay for. But those premiums are likely to rise across the industry, and banks may pass some of that cost onto consumers. What taxpayers get: They don’t have to worry about losing their deposits just because their bank acts reckless. So far, all these bailouts add up to about $400 billion the government could end up doling out to keep key parts of the economy solvent. As the zeroes and the billions mount, we tend to get a bit numb to the magnitude of the number. But it’s big. The savings and loan fiasco of the late 1980s—perhaps the biggest government bailout since the Great Depression—cost taxpayers a mere $130 billion. And $400 billion dwarfs government spending on most other things. It’s equivalent to more than half of the nation’s total annual budget for defense or for Social Security payments. And it’s more than one tenth of all federal spending in a given year. Worse—there’s more to come. Here are some of the bailouts still in the works:
The Detroit automakers. A bill working its way through Congress would commit up to $6 billion in low-interest loans to General Motors, Ford, and Chrysler. Some are pushing for loans of up to $50 billion. Yeah, they’re loans, not grants, and theoretically, the companies would repay them. Unless…something…happens.
More banks. The FDIC says it’s closely watching 117 problem banks at risk of insolvency. Those banks control about $78 billion in assets. Then there’s the daily drama of troubled Lehman Brothers, where investors wait to see whether a white knight will surface, cash in hand, or a Bear Stearns redux takes place. Source
Well we now the Banking bailout cost 810 Billion
The $700 Billion Bailout: One More Weapon of Mass Deception
September 22,2008
By Richard W. Behan
The American economy needs help, but there are other, far more equitable ways to accomplish it.
It is necessary only to assure the financial survival of Wall Street banks and brokerages, the administration’s most loyal supporters and its greatest political contributors — and in large measure the cause of the financial meltdown the country is facing……
Now I am going to retreat to my hoval and eat my bread and water like a good Slave.
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believable as well as juicy!