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Politics : Formerly About Advanced Micro Devices
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To: SilentZ who wrote (425015)10/11/2008 11:50:48 PM
From: Brumar891 Recommendation  Read Replies (2) of 1574006
 
Why did Fannie and Freddie fall if as the article implies Fannie and Freddie weren't really big players in subprime mortgages? That article presents the problem originating from 2004 on with Fannie and Freddie being essentially not very involved. I don't believe thats true. If it were, why did they fall?

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_ More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

_ Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

Of course. Private firms always do most mortgage lending. I wonder who is even doing the 16 or 17% non-private sector? Are those community organizations that got into the mortgage business - like ACORN?

_ Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

Here's the top subprime lenders through most of 2007 and early 2008. The banks (you can usually recognize the names) would be subject to the CRA. The ones that call themselve mortage or financial companies wouldn't be.
nationalmortgagenews.com

At any rate, that mortgage companies got into the subprime mortgage business doesn't change the fact the government regulatory changes in the 1990's created the market for securitized subprime mortgages.
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