Fannie and Freddie don’t deserve blame for bubble – The Washington Post


This article discusses the institutions that created the collapse of the mortgage market. It argues that the private mortgage industry deserves the lion’s share of the blame for the mortgage industry collapse. Fannie and Freddie were not lending to the extent of the private sector, and could not have participated in the build up to the bubble if they wanted to. Due to previous accounting irregularities they were subject to higher regulation than private banks, and the regulators prevented them from participating more. The fact is the increased regulatory supervision of Fannie and Freddie prevented them from participating in the risky mortgage lending practices to the extent that the other banks were.

Also see here discussing the Republican presidential candidates and the current administration’s focus on dismantling Fannie and Freddie instead of considering their role in fixing the housing market.


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