Posted on 01/18/2016 6:31:53 AM PST by Renkluaf
Subprime 2.0: In an orchestrated assault on the credit standards underpinning mortgages, no fewer than four Obama agencies have gone to war against FICO. If politicians don't want another bank crisis, they'll stop the attack.
Home loan approvals hinge on FICO credit scores. But the Obama regime views FICO scoring as too strict, cutting off millions of low-income minorities and immigrants from mortgages. So it's pressuring Fannie and Freddie, which control 90% of the mortgage market and set the underwriting standards for the entire mortgage industry, to abandon FICO for a softer standard in evaluating credit risk.
Obama's regulators look favorably on "nontraditional credit" like rent, utility payments and other factors that, studies show, have little value in predicting default risk.
The administration's goal is to inflate credit grades by the end of 2016 and socially promote an estimated 50 million deadbeats and unbanked, unscorable immigrants from the rental market to the mortgage market.
(Excerpt) Read more at news.investors.com ...
Isn’t there any way that banks can fight this?
Can’t they refuse to honor these guidelines?
This is utter insanity. I wasn’t aware that home ownership was considered a right.
.
LOL. As a newly independent contractor physician with good income I could not get a re-fi on an existing mortgage. But they want to give low income and illegals new mortgages.
Liberals will only be happy when the nation is a starving police state.
previous threads on this topic:
Re-Suicide: Obama Adopts Bush-era Tricks To Re-inflate Property Bubble
http://www.freerepublic.com/focus/f-news/3383296/posts
The Government Boldly Just Set Up Another Real Estate Meltdown
http://www.freerepublic.com/focus/f-news/3383172/posts
Fannie Mae Rolls Out Easy Mortgage, Catering To High-Risk Immigrants
http://www.freerepublic.com/focus/f-news/3381566/posts
I suspect the clock has run out and the actuality of this having an effect is nill
Does this mean our normal 800+ credit score will rise to 5000?
Kind of like adding zeros to Zimbabwean money...
Didn’t we just do this with disastrous results?
They are so desperate to try to boost the economy they will try anything once again. In their minds new mortgages contribute to the GDP so, let’s sell more houses!!!!!
This type of thinking with the goal of making home ownership an entitlement is what caused the housing bubble to burst in 2007 resulting in economic disaster. CRA programs initiated by Carter; enhanced by Clinton/Rubin; Fannie Mae Freddie Mac abuses and fraud (accounting worse then Enron) ignored by Frank/Dodd............resulted in the horrific bank failures and global economic collapse in 2007-2008.
Have we not learned from the failures of the past and are doomed for history to repeat itselt?
Yes and makes me furious! See post 11.
The real goal of these idiot is to make home ownership an entitlement. Ruined the world economy once, they want to do it again!
From the article it says that illegal immigrants can claim income from others to qualify to purchase a home.
Quote:
It’s all part of a government campaign to ease access to home loans for Hispanic immigrants who tend to live in groups and pool finances.
Snip
This is coming at a time when Fannie is launching a subprime mortgage product called HomeReady that caters to immigrants with weak credit and limited income. The new loan lets borrowers for the first time bundle income from roommates and relatives to meet qualifications for income. They have to put only 3% down and can use gifts from nonprofit groups to subsidize their down payments.
Before the crisis, your income had to be your own.
Now, as a renter, you can get a conventional home loan backed by Fannie by claiming others’ income.
NOTHING the Progs love more then OPM
Other
Peoples
Money
Found this on page 2 - Royce needs to be replaced.
Ed Royce, the House banking committee Republican who takes money from lenders operating in his Orange County, Calif., district that has many Hispanics. He’s co-sponsoring a bill pushing Fannie and Freddie to adopt alternative credit scores and approve more homebuyers.
The Big Short movie (not the book) blames greedy wall street bankers for the housing crisis. (The book hits the regulators more).
In reality, it was just this - Fannie and Freddie (who buy the vast majority of 1-4 family conforming loans in USA) easing their standards to allow all Americans to buy homes - whether they could afford them or not. Wall Street - following Fannie and Freddie guidelines, started packaging these loans and selling them outright; not just to Fannie and Freddie. Bottom line, the guidelines were way too generous (no doc, low doc, “liar” loans, NINA loans, etc.) and people got loans who could not afford the homes. They thought the house would appreciate so fast, they would have options. Didn’t happen.
We just can’t learn from history. This is the beginning of another housing crisis. Nothing wrong with renting until you can own. The easy appreciation of home values has not been universal.
The argument will be: Why, look, these are responsible hard-working homeowners, they deserve to be citizens. No mention of course that twenty people are living in what was designed as a single family home.
Now obammy wants more. And, in the old days, at least you couldn't borrow the 5% downpayment. Now it's 2.5% and you don't even have to have the money. You can receive it as a gift or whatever.
Helping people buy homes who have no money and are not responsible and mature enough to save any money, let alone make consistent house payments is not good policy, and not good for ANYONE.
Okay... I'll step off the soapbox. I am a Realtor btw. Anyone looking for a home, home loans have never been cheaper :)
Like I said, just another attempt (although with a different book cover) to statistically raise the GDP and claim the economy is doing fine. (It can either be called G.W. MKII or Willy Jeff MKIII) It is kinda like Jaws 3 really, really sucked.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.