09-26-2008, 02:50 AM
Too bad your only exposure to this was this particular source. It's not exactly news that there was pressure to make housing affordable to people who normally can't afford it, and while this didn't cause the bubble, but it played a fundamental role in the explosion of bad paper.
"in 1992, Congress passed the Government Sponsored Enterprises bill, which set “targets” (i.e., quotas) for Fannie Mae and Freddie Mac, which are quasi-governmental publicly-traded for-profit thing-a-ma-bobs, to encourage “affordable” and “underserved” (more or less minority) home loans."
A good idea in theory, to extend the dream of home ownership to more Americans, and particularly, more minorities, lower-income Americans, but banks aren't well-suited to applying progressive social programs. How creditworthiness is defined was altered to meet egalitarian ideals.
It's an unpopular issue to confront, because it reveals uncomfortable things about racial and social inequities.
This is also a conservative source, but it's more credible and statistically referenced than Sean's simplistic view.
http://www.takimag.com/site/article/the_...e_housing/
"in 1992, Congress passed the Government Sponsored Enterprises bill, which set “targets” (i.e., quotas) for Fannie Mae and Freddie Mac, which are quasi-governmental publicly-traded for-profit thing-a-ma-bobs, to encourage “affordable” and “underserved” (more or less minority) home loans."
A good idea in theory, to extend the dream of home ownership to more Americans, and particularly, more minorities, lower-income Americans, but banks aren't well-suited to applying progressive social programs. How creditworthiness is defined was altered to meet egalitarian ideals.
It's an unpopular issue to confront, because it reveals uncomfortable things about racial and social inequities.
This is also a conservative source, but it's more credible and statistically referenced than Sean's simplistic view.
http://www.takimag.com/site/article/the_...e_housing/