So who's fault is it? Greedy White Republican Investment Bankers? How about a fat Southerner with a penchant for fast food, chubby interns and cigars.
New York Times 1999 Article about Fannie Mae loosening credit policies.
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
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 moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
So the government , at the time lead by Bill Clinton, promoted bad loans to people who, by definition, could not pay them back. Now you believe the government can save you from the crisis it created.
Government is the only producer/product that when defective, people demand more of it. Well good luck with that. I'm sure it will turn out just fine.
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