If I might expand on the point I made above... H.R. 1461, which was introduced by Richard Baker (R-LA) and co-sponsored by 19 other Republican Congresspeeps, passed the Republican House (but not the Republican Senate). It "sought to increase GSE support for low-income housing and would permit Fannie and Freddie to buy larger mortgages than current law permits". The Senate bill S.190 was introduced by another Republican, Chuck Hagel (R-NE). It "sought to shrink the companiesâ portfolios by restricting the kinds of assets they can purchase" and it died a quiet death in the Committee on Banking, Housing, and Urban Affairs, which was chaired at the time by Richard Shelby (R-AL). You can find the records here: http://www.govtrack.us/congress/bills/109/hr1461 http://www.govtrack.us/congress/bills/109/s190 A somewhat detailed analysis of the two bills done by the Congressional Research Service can be found here, among other places: http://digital.library.unt.edu/ark:/67531/metacrs7896/m1/1/high_res_d/RL32795_2005Oct27.pdf
Yes, GSE loans failed at a lower rate than the Wall Street subprime super bomb specials. But the fact remains that plenty of those loans failed. When Maxine Waters praised Fannie Mae for the innovation of "100% loans" (i.e., zero down payment loans) does it seem to you Fannie Mae was a model of prudence? Does it sound like Maxine Waters wanted to take the steps needed to keep Fannie Mae on a sound footing? Well to you, it probably does, being a Democrat apologist and all. A sensible, unbiased person can see that most of the politicians in both parties were happy with the policies that led to the big crash. They were happy to see lots of people get houses who couldn't really afford them. The people who blame Bush for everything are just as foolish as the people who blame Clinton or Obama for everything.
Not only that, the GSE's don't even make it onto the "Top 25" list of all the subprime lenders of the crisis. Is your predisposition to blame government giving unwarranted prominence to the GSEs?
There's a long way between A. GSEs were not a significant player in the present crisis B. I'm a fan of GSEs. Can you describe any of the steps you took along the way?
Speaker of the House and Nancy Pelosi of California and Senate Majority Leader Harry Reid of Nevada (both Democrats) each made three appointments, while House Minority Leader John Boehner of Ohio and Senate Minority Leader Mitch McConnell of Kentucky (both Republicans) each made two appointments: Phil Angelides (chairman) - jointly chosen as chair by Pelosi and Reid Bill Thomas (vice chairman) - jointly chosen as vice chair by Boehner and McConnell Brooksley Born (Pelosi) Byron Georgiou (Reid) Bob Graham (Reid) Keith Hennessey (McConnell) Douglas Holtz-Eakin (McConnell) Heather Murren (Reid) John W. Thompson (Pelosi) Peter J. Wallison (Boehner) the Commission stated: "While the vulnerabilities that created the potential for crisis were years in the making, it was the collapse of the housing bubbleâfueled by low interest rates, easy and available credit, scant regulation, and toxic mortgagesâ that was the spark that ignited a string of events, which led to a full-blown crisis in the fall of 2008. Trillions of dollars in risky mortgages had become embedded throughout the financial system, as mortgage-related securities were packaged, repackaged, and sold to investors around the world. When the bubble burst, hundreds of billions of dollars in losses in mortgages and mortgage-related securities shook markets as well as financial institutions that had significant exposures to those mortgages and had borrowed heavily against them. This happened not just in the United States but around the world. The losses were magnified by derivatives such as synthetic securities.â[4][5]
The CBO estimates that the cost of the government conservatorship of Fannie Mae and Freddie Mac is $238 billion. Add to that the Federal Reserve purchasing $47 billion of GSE debt and another $53 billion in mortgage backed securities from the GSEs, and the Treasury Department buying $71 billion of mortgage backed securities, and we have a $400 billion hole in the budget created by the GSEs. So that puts Fannie Mae and Freddie Mac way higher than "25th" in the list of mortgage bust problem children. I'd say they're somewhere in the top five.