NY. Andrew Cuomo Staunch Supporter of Fiscal Irresponsibility
Press Release from U.S. Department of Housing and Urban Development
Months before the HOUSING BUBBLE DISASTER and TAXPAYER BAILOUTS OF THE BANKS AND MORTGAGE COMPANIES
Commentary: What HUD and Cuomo did is allow mortgages for persons that cannot afford them while driving up prices for those persons that could. If you could afford a house and bought real estate between 2001-2009 – you paid more money for a house that after the artificially inflated market corrected itself was actually worth far less than you paid. Leaving the taxpayer and public to bail out STUPID and IRRESPONSIBLE GOVERNMENT MARKET MANIPULATION.
Now Banks and Government are keeping assets on their balance sheets rather than selling them because the taxpayers bailed out the bank so banks can afford to hold onto the assets (using your (and my money) to pay the debt on the property) and the Government is making a land grab.
CUOMO ANNOUNCES ACTION TO PROVIDE $2.4 TRILLION IN MORTGAGES FOR AFFORDABLE HOUSING FOR 28.1 MILLION FAMILIES
WASHINGTON – Housing and Urban Development Secretary Andrew Cuomo today announced a policy to require (this is government improperly using its leverage to “force”, “require” or “coerce” behavior) the nation’s two largest housing finance companies to buy $2.4 trillion in mortgages over the next 10 years to provide affordable housing for about 28.1 million low- and moderate-income families.
Cuomo said the historic action by HUD raises the required percentage of mortgage loans for low- and moderate-income families that finance companies Fannie Mae and Freddie Mac must buy from the current 42 percent of their total purchases to a new high of 50 percent – a 19 percent increase – in the year 2001. The percentage will first increase to 48 percent in 2000.
Comment: Housing prices due to this policy rose 100% in N.Y. pricing many people and families that could afford homes out of the market while subsidizing persons that could not afford a home.
Comment: Home ownership may have once been an American Dream, but in most of the “BLUE” states it is a taxpayer nightmare.
Comment: the amount of taxes a homeowner is REQUIRED to pay i.e. property and school taxes on homeowners negates the equity amassed in the home. Not only is home ownership overrated with the current tax structure – it’s one of the biggest scams perpetuated on the people.
Commenting on the action, President Clinton said: “During the last six and a half years, my Administration has put tremendous emphasis on promoting homeowners and making housing more affordable for all Americans.
Clinton Presidency: where the housing bubble started. Not to mention setting the mechanisms in place for the stock market crash by de-regulating the securities and banking market and eliminating the need to have a buyer on a securities sale.
A laugher: Our housing programs and institutions have been a success.
Today, the homeownership rate is at an all-time high, with more than 66 percent of all American families owning their homes. Today, we take another significant step. Raising the GSEs goals will help us generate increased momentum in addressing the nation’s housing needs. I congratulate HUD Secretary Andrew Cuomo and the entire HUD team on their efforts in this important area.”
Question: what percentage of Cuomo-required home ownership loans were defaulted on and houses foreclosed?
Another laugher statement from Cuomo:
“This action will transform the lives of millions of families across our country by giving them new opportunities to buy homes or move into apartments with rents they can afford,” Cuomo said. “It will strengthen our economy and create jobs by stimulating more home construction, it will help ease the terrible shortage of affordable housing plaguing far too many communities, and it will help reduce the huge homeownership gap dividing whites from minorities and suburbs from cities.”
The mortgage purchase requirement for Fannie Mae and Freddie Mac – known as the Affordable Housing Goals – was last set by HUD in 1995, under a requirement mandated by Congress. The goals came up for renewal this year, and HUD had the choice of leaving them unchanged, lowering them, or raising them. In addition to helping low- and moderate-income families, the new initiative will also increase the affordable housing goals for loans made to underserved areas and will raise the goal for mortgages to benefit families with very low incomes.
Under the higher goals, Fannie Mae and Freddie Mac will buy an additional $488.3 billion in mortgages that will be used to provide affordable housing for 7 million more low- and moderate-income families over the next 10 years. Those new mortgages and families are over and above the $1.9 trillion in mortgages for 21.1 million families that would have been generated if the current goals had been retained.
National Association of Home Builders President Charles Ruma and Enterprise Foundation CEO Bart Harvey.
In addition, higher Affordable Housing Goals for Fannie Mae and Freddie Mac have been sought by the U.S. Conference of Mayors, the National Low-Income Housing Coalition, FM Watch and other groups.
CUOMO was in charge of one of the biggest financial disasters EVER. If the voters weren’t sure before – this fact solidifies him as the most qualified politicians to bankrupt be governor of New York
Congress gave HUD the responsibility of regulating Fannie Mae and Freddie Mac because the two companies are Government Sponsored Enterprises (GSEs) that were chartered by Congress.
The policy announced today will be implemented by HUD regulations. Such regulations go into effect after review by Congress and the Office of Management and Budget, along with a period of full public comment.
The GSEs buy mortgages issued by banks, thrift institutions and other mortgage lenders, and then package the loans and sell them to investors as mortgage-backed securities. When Fannie Mae and Freddie Mac buy the mortgages from lenders, they provide the lenders with the cash needed to issue new mortgages.
Congress has given GSEs special advantages – such an exemption from all state and local taxes except property taxes, and an exemption from Securities and Exchange Commission registration requirements.
In addition, the ties of the GSEs to government has helped them get the highest credit rating to reduce their borrowing costs, and has boosted investor confidence in the two companies, thereby helping to increase their earnings. The Treasury Department reports that the benefits of federal sponsorship are worth almost $6 billion annually to the GSEs.
The GSEs are publicly chartered to provide broad public benefits. Congress, through Fannie Mae’s and
If Fannie Mae and Freddie Mac fail to make a good faith effort to achieve the Affordable Housing Goals set by HUD, the Secretary of HUD has the authority to impose civil money penalties of up to $10,000 for each day the failure occurs.
Families are considered as having low and moderate incomes if they make no more than the area median income, which varies by community. The national average for the median income is $47,800.
In addition to raising the low- and moderate-income goal from 42 percent to 50 percent, HUD acted to raise two other Congressionally mandated goals. A special affordable housing goal for families with very low incomes and low incomes (those with less than 60 percent and 80 percent of area median) jumps from the current 14 percent to 20 percent (a 43 percent increase). In addition, a geographically targeted goal for underserved areas (central cities, rural areas, and underserved communities based on income and minority concentration) goes from 24 percent to 31 percent (a 29 percent increase).
COMMENTS ON HUD ACTION TO PROVIDE $2.4 TRILLION IN MORTGAGES FOR AFFORDABLE HOUSING FOR 28.1 MILLION FAMILIES
Sheila Crowley, President, The National Low Income Housing Coalition — “The National Low Income Housing Coalition welcomes the news…. The goals provide Fannie Mae and Freddie Mac the opportunity to join the resources and potential of the capital markets with the rental housing needs of the very poor…. Raising the goals will help to narrow the homeownership gap for minorities, women, and lower income Americans as well as lead to continued innovation in single and multifamily housing finance.”
Cushing N. Dolbeare, Housing Policy Consultant, Founder and Chair Emeritus, National Low Income Housing Coalition called the announcement “good news to everyone who cares about increasing rental housing production and broadening access to homeownership, particularly for people of color…. The goals that expire this year marked a major step toward broadening the benefits of the secondary market and increasing the current rate of home ownership to historic highs. It is heartening that the new goals will build on this experience and that this major commitment is now being made.”
Jesse Norwood, President of the National Conference of Black Mayors – “The National Conference of Black Mayors clearly understands that there exists a major affordable housing crisis in America and stands with HUD and Fannie Mae in support of affordable housing goals.”
J. Thomas Cochran, Executive Director, The U.S. Conference of Mayors — “HUD and Fannie Mae have responded to our call to provide greater access to loans by Americans looking to own their first home.”
Bart Harvey, Chairman & CEO, The Enterprise Foundation — “All of this is good news for low- and moderate-income families and reaffirms Fannie Mae’s aggressive outreach to those most in need. We salute the good news and most of all the hundreds of thousands of families that will be effected by having a decent, affordable place to live.”
Mike House, Executive Director, FM Watch, a GSE watchdog group — “Secretary Cuomo has shown extraordinary leadership on this issue. This is an important and necessary step HUD has taken.”
Content Archived: January 20, 2009