Fannie Mae (FNMA)

[kthomp19]

The "significant losses" the GSE's suffered were the $40 BILLION per month CRAP alt-A, subprime, no-Doc mortgages that F&F were FORCED to buy from TBTF banks to prevent a global financial meltdown, mortgages that TBTF banks made at their own choosing.

Wrong. Tim Howard specifically addressed this (emphasis added):

This report of “$40 billion per month in toxic mortgage purchases ordered by Treasury” has been given wide circulation, but it’s mythical. Fannie Mae puts out considerable information about the volume and composition of its mortgage purchases in its monthly summaries, 10Qs, 10Ks and credit supplements. Focusing on credit quality, the profile of Fannie’s 2009 mortgage acquisitions (both portfolio purchases and MBS guarantees) is dramatically better than in 2007 or 2008. Taking just two (of many possible) examples: only 10 percent of Fannie’s 2009 loan acquisitions had LTVs over 80 percent, compared with 25 percent in 2007 and 22 percent in 2008, while in 2009 74 percent of Fannie Mae’s new business had credit scores at or above 740, compared with 40 percent in 2007 and 55 percent in 2008.

Then there’s the fact that after five and a half years of performance results on Fannie’s 2009 book of business, its cumulative default rate is similar to the high-quality 2002 and 2003 books, and a fraction of the default rates of the 2007 and 2008 books. There is absolutely no evidence that Fannie Mae purchased toxic loans post-conservatorship, yet continued references to this myth, including by SCS, perpetuate it, which is not helpful.