Why Did Bill Clinton Change Mortgage Lending Rules?
He allowed GSE’s (government sponsored enterprises) like Freddie Mac (, etc) to purchase subprime loans that were created by lenders. He basically formally approved subprime lending.
It is documented by the FTC (Federal Trade Commission)
“Freddie Mac, one of the primary government-sponsored enterprises involved in the purchase of mortgages, recently announced plans to enter the secondary market in subprime loans by purchasing significant numbers of “A minus” subprime mortgages by 1998 and the higher-risk “B and C” loans by 1999.(20) ”
Bill Clinton made the decision. He also appointed the director of the “Office of Federal Housing Enterprise Oversight (OFHEO)”
“The federal regulatory body that oversees the government-sponsored entities (GSEs), Freddie Mac and Fannie Mae. It was established as an independent entity within the Department of Housing and Urban Development by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. The OFHEO works to ensure the capital adequacy and financial safety of the two housing GSEs. ”
“On June 6, 1996, President Clinton announced that he had directed FHA to reduce the up-front mortgage insurance premium (UFMIP) for first-time homebuyers who receive housing counseling”