Inner City and Under Served Populations

I thought as a corollary to the current financial crisis to our reading of the past 2 weeks, I would throw out my feelings about how we got here. From what I gathered doing my own research, it would appear that back in the 90's Freddie Mac and Fannie Mae were basically 'ordered' to expand their mortgage lending into under served and inner city locales by the executive branch. In order to accomplish this Freddie and Fannie developed many exotic loan packages to get more people approved. These people took loans on the belief that housing values would continue to rise. Or they took the loans with teaser rates. Regardless many didn't read the fine print, and the lenders made it difficult to follow the lending terms. By lending so much money in this area, Freddie and Fannie set up the fall that is occurring now.

I would equate this to 'you cannot throw money at a problem and hope it goes away.' We need more creative ways of assisting in the development of low income and under served populations. Not just money.