The stories you want. The opinions that matter.
No, thanks
Tag: fannie mae
Fannie Mae Accused Of Neglecting Foreclosures In Minority Neighborhoods

Fannie Mae Accused Of Neglecting Foreclosures In Minority Neighborhoods

By Carrie Wells, The Baltimore Sun (TNS)

BALTIMORE — A collection of fair housing advocacy groups on Wednesday accused Fannie Mae of a pattern of maintaining and marketing its foreclosed houses in white areas — including in the Baltimore region — better than in minority areas.

The National Fair Housing Alliance and 19 local fair housing organizations filed a complaint alleging violations of the federal Fair Housing Act with the U.S. Department of Housing and Urban Development after a five-year investigation in which investigators visited and documented the conditions of the foreclosed properties Fannie Mae owns in 34 metro areas.

The investigators presented photos at a news conference Wednesday of boarded windows, broken gutters, dead animals, litter and other signs of neglect that they said were far more common at Fannie Mae-owned homes in black and Latino neighborhoods.

“As the largest owner of (foreclosed) properties in the country, everything they do is magnified,” said Anne Houghtaling, director of the HOPE Fair Housing Center in Chicago, during a news conference in Washington. “You can spot them from a block away. They are the neighborhood eyesore….Because of this there is an uneven recovery in our neighborhoods.”

Fannie Mae, a government-sponsored company charged with encouraging home ownership, disputed the allegations.

“We strongly disagree with these allegations and firmly believe they have no merit,” Fannie Mae spokesman Andrew Wilson said in an email. “We are confident that our standards ensure that properties in all neighborhoods are treated equally, and we perform rigorous quality control to make sure that is the case. We remain dedicated to neighborhood stabilization efforts across the nation, including with respect to our maintenance of foreclosed properties.”

“The bottom line is that (foreclosures) in communities of color are significantly less maintained than in white communities across the country,” said Gail Williams, executive director of Metro Fair Housing Services in Atlanta.

Photo: futureatlas.com via Flickr

Fannie And Freddie Must Go

Fannie And Freddie Must Go

Say we didn’t hear that. Say we didn’t hear that rules for mortgages guaranteed by the taxpayers are going lax once again.

Oh, but we did. For starters, the push is on to lower the minimum down payment required for Fannie Mae and Freddie Mac mortgages to only 3 percent.

During the housing bubble, Fannie and Freddie bought a lot of substandard mortgages. That’s why, when house prices cratered, so did they. The government had to bail them out to the tune of $188 billion. It makes little difference that the taxpayers were eventually paid back. Assuming the risk was not their job.

Taxpayers, you are being handed the bag once again. What makes you particularly vulnerable are the potent political forces determined to keep the game going — an odd alliance of Wall Street financiers and advocates for low-income Americans.

Fannie and Freddie are “government-sponsored enterprises.” They buy mortgages from lenders and package them into securities, which they then sell to investors. As long as these securities carry the government guarantee, investors need not lose sleep over the quality of the mortgages. Taxpayers should.

There have been attempts since the financial meltdown to dismantle Fannie and Freddie. But powerful banking interests have fought every move to transfer risks from the taxpayers’ shoulders to their own.

In response to an angry public, they said, “Rather than end the guarantees, let’s add safeguards to better protect taxpayers.” Some new rules were made. Now they’re being unmade.

The Federal Housing Finance Agency wants the minimum down payment required for a Fannie-backed mortgage, raised to 5 percent, lowered to 3 percent. The prudent rule is for at least 20 percent down.

So-called advocates joined the push for easier mortgage terms — and they should be ashamed, by the way. “Easy money” has been no friend to the poor.

Wall Street feasted during the real-estate orgy, preying on the unsophisticated with abusive fees and exploding interest rates. Folks of modest means — drawn into its web by no- and low-down-payment loans — lost their homes.

But before going on, let’s properly assign blame for the recent financial mess. It was not, as many on the right insist, programs forcing upstanding bankers to lend money to marginally qualified borrowers — read “minorities.”

By the late ’90s, half of subprime loans were made by mortgage companies not subject to the much-maligned Community Reinvestment Act. And in any case, the George W. Bush administration gutted the CRA regulations in 2004.

Low down payments often come with higher interest rates — and a requirement to also buy mortgage insurance. Far from being compelled to lend to poor people, Wall Street seeks them out as appealing targets. And when taxpayers assume the risk, it’s a no-lose proposition, is it not?

As for this passing on of risk from lenders to taxpayers, you don’t have to be a conservative to despise it. Barney Frank, the former Massachusetts rep who once headed the House Financial Services Committee, was appalled at the killing of another rule — one that made lenders assume at least 5 percent of the risk for less-than-supersafe mortgages that were rolled into securities.

Frank was extra pained to see advocates for the poor helping the banking and real estate interests pull this off.

In most of the free world, governments do not guarantee mortgages. Nonetheless, their people own homes. In this country, bankers and allied interests extract both lax rules and taxpayer guarantees.

And to think, Fannie and Freddie aren’t even out of conservatorship yet.

It’s time this story moved from the business pages to the front pages. Fannie and Freddie must go.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators Web page at www.creators.com.

Photo via Wikimedia Commons

Want more political news and analysis? Sign up for our daily email newsletter!

Bachmann Hypocrisy Rampant On Home Loans

Just weeks before she called for “breaking up” Fannie Mae and Freddie Mac “so that the encumbered taxpayer no longer backs them,” Minnesota Rep. Michele Bachmann received a $417,000 loan to purchase a 5200 square-foot golf-course home that experts say was definitely backed by one of the two lenders:

Seeing problems with the programs — especially the high costs to taxpayers — hasn’t stopped a concerned public or other members of Congress from taking advantage of the lower interest rates that come due to government backing.

Bachmann’s mortgage was part of a package of debt that she and her husband, Marcus, assumed to buy their home, public records show. They also have other loans, including a home equity line of credit, a business mortgage and another business loan for their Christian counseling clinics, bringing their liabilities to more than $1 million, according to the most recently available public records.

The Bachmanns’ assets, according to her latest financial disclosure statement, range between $862,018 and $2 million.

Bachmann’s campaign is predicated on her having a pristine reputation on the issues (especially among social conservatives) so she can build her policy credibility and tack to the center, at least rhetorically; botches like this — and the recently reported acceptance of Medicaid (welfare!) by her husband’s clinics — threaten her reputation of ideological purity.