Sunday, October 12, 2008

Fannie Mae and Freddie Mac

For those who think or hear that Fannie Mae and Freddie Mac were one of the main causes of the financial crisis, click HERE for an article that refutes such assertions.


travolta said...

There is so much wrong with this article I'm not sure where to begin.

Fannie...and Freddie..., don't lend money, to minorities or anyone else, however. They purchase loans from the private lenders who actually underwrite the loans.

And everyone knew they would buy the loan as long as it was conforming. Thereby backstopping the whole loan market.

In a speech last March, Janet Yellen, the president of the Federal Reserve Bank of San Francisco, debunked the notion that the push for affordable housing created today's problems.

"Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans," she said. "The CRA has increased the volume of responsible lending to low- and moderate-income households."

I hope you don't tolerate paragraphs like this in your English papers. The lead sentence is contradicted by the quote.

There is plenty of blame for both political parties in the sub-prime credit disaster, but CRA and Fannie and Freddie are absolutely to blame.

I also find it amazing that this article is apparently in the news section of the paper and not the editorial section. This is a prime example of liberal bias in the mainstream media.

Quintilian B. Nasty said...

What I find annoying is that those two entities (Fannie Mae and Freddie Mac) are becoming the scapegoats.

As you say, there's plenty of blame to be shared.