Posts Tagged ‘Fannie Mae’
Blogging Meltdown – Culprit 5: The Federal Reserve and Artificially Cheap Credit
After explaining the preceding four culprits: 1) Fannie Mae and Freddie Mac, 2) The Community Reinvestment Act and affirmative action in lending, 3) The government's artificial stimulus to speculation, and 4) The "pro-ownership" tax code, Dr. Woods gets to the major culprit, the Federal Reserve and artificially cheap credit. The previous four [...]
Blogging Meltdown: Culprit 1: Fannie Mae and Freddie Mac, Part 2
Fannie Mae and the political establishment, in the name of helping the “disadvantaged,” worked to lower lending requirements. As the New York Times reported in 1999, Fannie Mae’s initiative would encourage banks to “extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans.” The [...]
Blogging Meltdown: Culprit 1: Fannie Mae and Freddie Mac, Part I
Fannie Mae and Freddie Mac, officially known as “government sponsored enterprises” or GSEs were at the center of the collapse What do they do? Do they offer loans to home buyers? No, they instead buy loans from banks on the secondary market. After a bank offers a home loan to a customer, it then sells the loan to Fannie or Freddie. So, the [...]
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