May 6, 2013
Mel Watt, President Obama’s nominee for director of the Federal Housing Finance Agency, pushed government programs to help welfare recipients buy homes during the creation of the subprime mortgage bubble.
Watt, a 20-year Member of Congress from North Carolina’s 12th district, also had a hand in programs allowing borrowers with poor credit to buy homes with no down payment. The American financial system was subsequently destroyed when millions of bad borrowers defaulted on their loans, setting off a market crash that wiped out nearly 40 percent of the net worth of Americans.
In 2002, Watt teamed up with Freddie Mac and Fannie Mae, Bank of America, BB&T, and UJAMMA Inc., to announce Pathways to Homeownership, a pilot initiative designed to give home loans to welfare recipients.
A press release from Watt’s campaign office in October 2002 said that the loans to the welfare recipients would require “as little as $1,000 of the down payment to come from their own funds” and that the city of Charlotte would help borrowers obtain a “down payment subsidy” to cover the rest of the 3% down payment.
This article was posted: Monday, May 6, 2013 at 8:09 am