Fannie Mae-No Politics (FNMA)

[xihil]

The government encouraged Fannie Mae to make risky investments

I'm telling ya, they put a young inexperienced silver tongue stubborn mule in charge and this is what happened. There are tons of articles about Cuomo and his inexperience.

http://www.villagevoice.com/2008-08-05/news/how-andrew-cuomo-gave-birth-to-the-crisis-at-fannie-mae-and-freddie-mac/

This is a long article, but it goes to show that Cuomo (aka the Government) had a significant part in this mess.

"But Cuomo wasn't only stifling data that HUD could use to keep the GSEs out of trouble. He also went against his own recommendation—in a report issued jointly with the Treasury Department a few months earlier—that called for a prohibition against the GSEs purchasing loans "with high costs and/or predatory features." Instead, Cuomo decided without explanation to adopt rules that prohibited nothing.

Consumer groups then contended that if HUD wasn't going to bar bad loans, it should at least penalize the GSEs for every one they made. Cuomo declined to do that as well"

Government opened the flood gates, no rules, no penalties.