Their stocks soared with the boom in housing prices — a boom the two agencies goosed by making it possible for ever more people to buy homes, even those who really couldn’t afford the payments. As long as the housing bubble grew, through the 2000s, Fannie’s and Freddie’s profits papered over accounting scandals and huge salaries handed out to the quasi-bureaucrats who ran the show.
It wasn't FnF that made it possible, it was an incompetent Congress that "made" [more like forced] banks to make these loans to individuals who otherwise couldn't qualify for the amount of loans they were getting. I think there was also a penalty clause for banks who didn't comply. And as a reward to the compliant banks, they allowed these risky loans to be packaged and sold --- and FnF (who were run by friends of those congresspersons) bought many of these notes. Stupid.
And since the House of Reps is far more stupid & incompetent now, it'd be best for the nation that they stay out of the housing market.
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