On 12/19/2012 8:44 PM, Stephen P. King wrote:
Also: http://www.sjsu.edu/faculty/watkins/subprime.htm
That's a very biases analysis that implies Fannie Mae and Freddie Mac bought subprime loans, which they did not. It was the banks and private mortgage companies that created the adjustable rate loans with teaser rates. FM's only bought fixed rate loans with substantial down payments. The did however buy 'liar loans'. And their very existence made private lenders assume (correctly) that they would be bailed out. Here's a much more balanced view of the events: http://www.econbrowser.com/archives/2008/07/did_fannie_and.html
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