There is plenty of blame to go around for the U.S. housing bubble, but not much of it belongs to Fannie Mae and Freddie Mac. The two giant housing-finance institutions made many mistakes over the decades, some of them real whoppers, but causing house prices to soar and then crater during the past decade weren’t among them.

The biggest culprits in the housing fiasco came from the private sector, and more specifically from a mortgage industry that was out of control. These included lenders who originated home loans, investment bankers who packaged them into securities, rating agencies that misjudged these securities, and global investors who bought them without much, if any, study.
In other words, America’s mortgage securitization machine was fundamentally broken. It created millions of mortgage loans that, even under reasonable economic assumptions, stood little chance of being repaid — and were not. As a result, hundreds of billions of dollars were lost as defaults and write-downs brought the financial system, and the wider economy, to the brink, requiring a massive government bailout.

Also to blame, of course, were regulators, who gave the private mortgage market little, if any, oversight. The market’s watchdogs were lulled to sleep by a misplaced view that self-interested private financial institutions would regulate themselves.



HOWS THAT PRIVATE SECTOR WORKING OUT FOR AMERICA!?!?? yeah thought so...


http://www.washingtonpost.com/realestate/fannie-and-freddie-dont-deserve-blame-for-bubble/2012/01/23/gIQAn3LZMQ_story.html

I agree and disagree. Freddie and Fannie WERE part of the blame. What of their mythical and erroneous hedging? Their hiding of their true financial picture? You highlighted several parties that had a hand in it, but to clear those two, nice try. The two GSEs themselves purchased tons of private MBS, and really violated their own standards for rational lending.

The GSEs came in after the housing bubble started to burst in 2006. During the bubble years of 2002-2005, the growth in mortgage originations came from the private banks.



Remember Congress required the GSEs to refile the financial statements and placed restrictions on their portfolios. When the bubble started to collapse, those controls were relaxed. A lot of the bad loans purchased by the GSEs in 2006 and 2007 were the result of fraud by the banks. Foreign investors had stopped buying the mortgage securities because most of the loans were being defaulted on in the first 180 days, many of them almost immediately. Bank of America and its Countrywide subsidiary were the targets of many of these mortgage buybacks demands by investors.

and yet when the shit hits the fans its the right wing propaganda machine into over drive blaming the "liberal" media, the Unions, the public sector, NPR, pbs AND THOSE SOCIALISTS DEMOCRATS for all the countries WOES! hahahahahah cough cough SEPUKU DEAD

Have things been adjusted so the mortgage racket doesn't pull this shit again for awhile?

enough folks to observe lendors realtors etc to enforce current laws and regulations


do people dream of gaining back the value of their properties at its highest before the bubble burst even that was falsely created?

Daniel Mudd, who headed Fannie Mae during the years it loaded up on toxic assets, was a major Republican donor and a pioneer for Bush. Yes, he gave some money to Dodd but it is dwarfed by what he gave to Bush, the RNC and other Republicans during that time.

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http://bible.cc/1_corinthians/13-11.htm

WashingTone-Locian Wrote:
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> Daniel Mudd, who headed Fannie Mae during the
> years it loaded up on toxic assets, was a major
> Republican donor and a pioneer for Bush. Yes, he
> gave some money to Dodd but it is dwarfed by what
> he gave to Bush, the RNC and other Republicans
> during that time.


I seriously doubt you want to put Mudd's donations and culpability up against Frankin Raines'.

the Bush administration blocked the states from enforcing predatory lending laws against the large banks. the laws would've required lenders to certify that the borrowers could afford the payments, including the period when the mortgages recast as 25-yr fixed-rate.

HUD also approved the DPAs in 2001. the subprime debacle would've been avoided if buyers had been required to self-fund downpayments and closing costs.