There’s a seemingly well-thought-out mortgage finance article on the Internet today.
The article explores potential threats to opening up the credit box for more mortgage lending.
And despite America’s mortgage market being more regulated today than at any point in the history of this nation, there is something very rotten at the heart of it: OBAMA!
This article, written by Chriss Street, on Breitbart offers an explosive headline (why I read it) which goes unproven by fact in the article itself (why I wrote this).
Here’s the gem of a headline:
“Obama makes new push for minority mortgages.”
In reading the article, this appears automatically to be a problem.
In the article, Street writes that Fannie Mae and Freddie Mac are moving “aggressively” to get home loans to blacks and Hispanics, which is of course a bad thing because loans to minorities ruined this country’s economy in 2007.
Here’s the lead paragraph:
“The Obama administration is demanding that minorities again receive preferences to qualify for mortgages–the same policy that helped trigger the sub-prime mortgage crisis and the 2007-8 financial crash.”
But look closely: This seemingly explosive mortgage lending article actually doesn't make any sense.
For one, there is no proof of this demand. The article only includes a quote from Obama that's five years old. Of course, one could make proof if looking the right places, but Street doesn’t go that route.
Instead the article meanders from Dodd-Frank to the Community Redevelopment Act, from the National Association of Realtors to the Federal Housing Finace Agency…and astonishingly from FICO to VantageScore. Links are substituted for proof of linear thought, which is unnecessary, as this blog proves.
Street makes the argument that better credit scoring and the use of alternative models are actually less better than the systems they are updating.
“But President Obama and his community organizer allies complain that FICO 9 is still dependent on data submitted to the credit bureaus. They believe that credit scores should include the regular rental and utility payments history that are captured by VantageScore, but are not reported to credit bureaus unless there is a major problem.”
Street doesn’t name those organizers or define who “they” are, so you’ll need to figure that out yourself.
Street continues [italics are mine].
“The real issue is not easing of qualifying credit scores from the overly cautious FICO 770 back to a reasonable FICO 710. It is the promise by VantageScore’s CEO Barrett Burns that he can add credit scores for 30 million more people with 9.5 million being “Latino or African-Americans.” Burns believes about 2.7 million have credit scores above 600 and could qualify for a Federal Housing Administration single-family loan.”
Wait, the real issue is being able to get only one-third of all new mortgages to the two largest minorities in America?
So who gets the other two-thirds? Whites, then, right Street?
Well, by that stream of logic, thanks Obama for “demanding that minorities again receive preferences to qualify for mortgages," as Strett writes.
Mr. President! Your attempts at creating workable, equal-rights housing policy will fail once again!
No wait, that makes no sense, so actually Breitbart just accuses Obama of doing something that’s not really a thing.
And that opinion is based on reading the Breitbart article, as it stands alone, with a catchy headline, but no real point.