Archive

March 3, 2000

Fannie to Boost Subprime Activities

Fannie Mae is going to increase its subprime lending activities to improve its record of lending to African-Americans and to meet the new affordable housing goals issued by the Department of Housing and Urban Development. "We have not been a major presence in the subprime market, but you can bet that under these goals we will be," Fannie Mae chairman Franklin D. Raines said at a Thursday news conference. "We can bring lower-cost credit to thousands and thousands of African-American families and move them out of the high-cost market." Mr. Raines called the news conference to express outrage at a Washington Post news story that said Fannie Mae has policies that discourage the purchase of minority loans. He denied that such policies exist and pledged that Fannie Mae would lead the market in making mortgage credit available to African-Americans in this decade. Fannie Mae's record up till now has not been impressive. "While we did not surpass the market for lending to African-American families, I pledge today that we will," Mr. Raines said. Freddie Mac officials also objected to the Washington Post story and denied that their company has policies that discourage the purchase of loans to blacks.