There was a great satirical article about how the various newspapers would report the end of the world. There was something about for the Washington Post it would report, “Women and minorities hardest hit.”
I don’t know how inefficient mortgage market and a bloated government helps minorities.
Last week, the Obama White House unveiled its plans for overhauling the troubled mortgage industry. The White House is proposing the gradual phasing out of the federal mortgage giants, the Federal National Mortgage Association, or Fannie Mae, and the Federal Home Loan Mortgage Corporation, or Freddie Mac. More than 90 percent of all mortgages written in this country currently flow through Fannie and Freddie.
The proposals include raising fees for borrowers and requiring larger down payments for home loans. This could boost mortgage rates and make it harder for homebuyers to get those 30-year fixed rate mortgages. The Obama proposals coincided with the release of another study, showing that mortgage lending to African Americans and Latinos has plunged by more than 60 percent since 2004. That’s compared with a drop of just 17 percent for non-Hispanic whites.
We wanted to talk more about the future of Fannie Mae and Freddie Mac and what it means to all borrowers and particularly minority borrowers and lenders, so we’ve called Barry Zigas. He’s the director of housing policy with the Consumer Federation of America. That’s a consumer organization. And he’s also a former senior vice president at Fannie Mae, where he led the corporation’s community lending initiatives.