Reason #37

WE know well the slick surface of the road to hell. Good intentions provide a deceptively safe route, where hazards are ignored to the eventual peril of the traveler.

And it was with good intentions that lawmakers and financial firms took steps in recent years that have led to the financial crisis we find ourselves in today.

Here's just some of the history.

In 1999, the Fannie Mae Corp. expanded its program to put home ownership within reach of more people.

A story in the Sept. 30, 1999, New York Times cheerily reported, "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 lenders."

The Times said the Clinton administration was bringing increasing pressure on Fannie Mae - the nation's largest underwriter of home mortgages - to provide more home loans to lower- and middle-income people as well as those with questionable credit ratings.

Interestingly, the Times included this warning in its story:

"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 downtown, prompting a government rescue similar to that of the savings and loan industry in the 1980s."

But who paid attention to that? After all, the intention was to get the poor and minorities into their own homes.

Also in 1999, the Clinton administration and congressional Republicans agreed on a massive banking deregulation bill.

http://www.dailymail.com/Opinion/HoppyKercheval/200809300145