Everyone is guilty of it, Left and Right, but when you hear the cause of a problem long before you hear the data, you can bet that something is being shoveled your way.
This happened when we heard how much the Community Reinvestment Act (CRA) was 'the cause', right? Turned out that data was crap. Same for how dangerous it would be if the FDIC limit were not raised to $250,000. Turned out that was crap, too.
Now we hear how bad Freddie and Fannie were, even from the mouth of the President. *sigh*
These two did not participate in the "affordability" products that were dreamt up by the private sector in the first half of the 2000s:
Washington Post Staff Writer
Thursday, May 12, 2005; Page E04
Mortgage financing giant Fannie Mae said yesterday that its share of the mortgage-related securities market dropped from 45 percent in 2003 to 29 percent in 2004 because of the growing popularity of adjustable-rate mortgages, according to a filing with the Securities and Exchange Commission.
Although business at Fannie appears to have been robust, it would be a stretch characterize their numbers as "go-go growth" or "unfettered". In fact, before Greenspan couldn't have been bothered to regulate using federal authority, Fannie had laid down underwriting guidelines that just said "no" to a lot of the most ridiculous provisions that brokers were dreaming up to help them sell, sell, sell.
Today, the two could be 80% of the market. Yes, the truth is, if it weren't for them keeping lending, we'd have a far, far worse problem on our hands.
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