07-19-2016, 03:00 AM
(07-19-2016, 02:40 AM)Brownshoe Wrote: By signing the the affordable housing law. Making Fannie Mae and Freddie Mac buy a lot more "bad" loans.
Fannie and Freddie did not cause the housing bubble. The housing bubble rose the fastest when Freddie and Frannie were dropping in market share. During the peak rise of the housing bubble ('03 -'06) the market share of Wall Street private lenders subprime mortgages rose from 10% to 40%.
And there was no legislation that "forced" these private lenders to issue sub prime mortgages. They loved doing it because they took the profit in up front costs and then sold off the risk in derivative investments.
