Fannie Mae Mortgages

This video will discuss Fannie Mae’s new mortgage outreach program, targeting low-income families, minorities, and immigrants. The nation’s biggest source of mortgages plans to guarantee $150 billion in loans over the next seven years, and reach out to five million families who would otherwise be shut out of home ownership. It is creating a big incentive for banks to lend to these borrowers. But lurking behind this PR coup are two bits of smart economics. First, Fannie is mining a huge, untapped market of low-income renters who are excellent credit risks. Contrary to popular belief, says Prudential Securities analyst Thomas O’Donnell, “Poor people pay their bills. They are not cynical or sophisticated enough to go to bankruptcy lawyers.”