Friday, February 08, 2002
Is Fannie Mae a Redneck?-A recent report showed that federally-chartered mortgage intermediaries FNMA (Fannie Mae) and FHLMC (Freddie Mac) had a lower-percentage of minority loans in most cities than had been underwritten by lenders. There could be two reasons, neither of which would be racist. One reason could be that local banks choose to hang on to minority mortgages rather than sell them to FNMA. The other possibility might be the credit scoring system or FICO that FNMA uses. It's propriatary, so we don't know what is weighted. Some FICOs can create lower scores for minorities based on non-racial financial data.
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