Two Papers In One! The New York Times, September 30th, 1999: “Fannie Mae Eases Credit To Aid Mortgage Lending:”

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

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In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.

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In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980′s.

The New York Times, yesterday: “It’s clear that a lot of smart people simply didn’t see the housing bubble, the instability of our financial sector or the shock that came in 2007 and 2008.”

Actually, I knew a few who did:

And then there were those old guard reactionaries who chose to do nothing:

ROVE: The biggest accelerant in this economic difficulty was the failure of the government to rein in Fannie and Freddie. It was the Bush administration trying to rein in Fannie and Freddie. A new senator came to the United States Senate in January 2005 and refused to join the reform efforts, in fact, joined a filibuster effort to, to on the, on the bill that the administration offered up to rein it in. That senator was-

LAUER: That senator was?

ROVE: -Barack Obama of Illinois.

To be fair, that’s at least making a choice, no matter how disastrous in hindsight, which is a step beyond voting present.