Comments on: For Those Who Forget, How We Got Into This Mortgage Mess

By: Austin REALTOR Sam Chapman

Austin REALTOR Sam Chapman — Fri, 10 Apr 2009 17:13:19 +0000

It started with the Community Reinvestment Act. That picked up steam under Clinton. The Bush administration tried to put more restrictions on it, but there was too much pressure to get loc income people into homes. That and greed got us into this mess.

By: Tom Frey

Tom Frey — Thu, 26 Feb 2009 08:25:36 +0000

I attended several sessions sponsored by Fannie Mae where it was stated that Congress required upwards of 50% of their production to be “Community” mortgages. These were essentially mortgages for folks who wouldn’t normally qualify for a home loan given normal qualifying standards. And up to 100% of the purchase price…Now, these people had to qualify with income, assets (minimal as they were), employment, and credit.

My concern over the years was that the loan was good for that brief moment in time. They were marginal borrowers. So, if a minor problem occured in the future, they could default on the loan more easily than those who would qualify through the more traditional guidelines.

My contention has been that many of the “alternative” types of mortgages were created to pick up where Fannie and Freddie left off. Remember, Fannie and Freddie were treading were they shouldn’t have been. So, these borrowers were even more vulnerable to economic changes.

By: Jill

Jill — Thu, 05 Feb 2009 03:33:12 +0000

Wow! Hopefully we’ve learned our lesson.

By: Sumner County Real Estate and Auction News! » Well Put.

Sumner County Real Estate and Auction News! » Well Put. — Wed, 04 Feb 2009 04:34:33 +0000

[...] I thought this was well put. [...]