In a surprise move, Fannie Mae and the Federal Housing Administration, the largest sources of mortgage liquidity in the US housing market, announced Friday that they will no longer purchase or insure mortgage loans originated in Chicago’s Englewood and West Englewood neighborhoods.
“Part of our core mission is to help struggling families and stabilize neighborhoods and home values,” said a Fannie Mae spokesperson. “We can’t accomplish that mission in urban neighborhoods that have been written off by their local governments as plantations to warehouse the poor and concentrate criminal elements. The City of Chicago has clearly abandoned all hope for Englewood, and Fannie Mae’s new policy is simply reflecting that fact. We do not have the resources to make up for the complete lack of local law enforcement in policing mortgage fraud in these areas.” A spokesperson for the FHA declined to comment.
The Fannie Mae and FHA announcement indicated that additional neighborhoods in Chicago and other major cities will become subject to the loan ban in the future.
April fools — The above is, of course, a prank that doesn’t in any way reflect the position of Fannie Mae or the FHA.
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