A friend has favored us with an old New York Times clipping, Steven A. Holmes, Fannie Mae Eases Credit To Aid Mortgage Lending, N.Y. Times, September 30, 1999, and it contributes to our understanding of who is responsible for the economic disaster we are in. You can get the whole article on Nexis, but here are two passages that say it all without need for comment, even though forgoing one is a tour de force of self-restraint on our part.
“Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and morderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
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“In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-susidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.”