Fannie Mae-No Politics (FNMA)

[obiterdictum]

Sean Duffy (R-Wis.) will chair the housing and insurance subcommittee, which will now include oversight of Fannie Mae and Freddie Mac.

In a March 10, 2016 editorial, Sean Duffy states,

If you watched “The Big Short” you never even heard the names of two government sponsored enterprises which would become household names as the crisis unfolded: Fannie Mae and Freddie Mac. Thanks to political incentives, Fannie and Freddie’s underwriting standards became so relaxed that people could get a mortgage without showing any documents to verify their income. The result was that thousands of people bought homes they could not afford. Fannie and Freddie got away with this by packaging – or “securitizing” – those mortgages and then selling them off to the market as gold. When banks and investors realized the true value of these loans, no one wanted to buy them anymore because they could no longer guarantee what was in them. Couple this with an asset devaluation issue: these mortgages were no longer worth the value on the books and so began the rippling effect that turned into the financial crisis. A few greedy executives on Wall Street did not cause that, they took advantage of it. - http://ijr.com/opinion/2016/03/254059-big-short-fell-short-explaining-financial-crisis/