- Fannie and Freddie are more closely regulated than private companies, so they're shenanigans were limited. They couldn't do subprime loans - loans given with no income verification - by rule.
- However, they weren't completely innocent, as they tried to stretch their ability to participate within the rules as much as possible.
- The housing market is so bad, that even these more regulated companies are sinking as people with conventional mortgages end up with negative equity.
Tuesday, July 15, 2008
Mortgage crisis: Fannie, Freddie, and the rest
If you're familiar with "when banks compete, you win," then you probably listen to a news source that discusses the mortgage crisis. Paul Krugman's been keeping me informed, and he does a nice job of explaining what's going on:
Subscribe to:
Post Comments (Atom)
1 comment:
strictly speaking, the absence of income verification was a common characteristic of subprime mortgages in recent times, but does not define such mortgages.
responsible subprime lending has long been part of the mortgage business, and i believe i heard the other day that there are still billions of dollars in subprime mortgages originated annually (and appropriately so), despite the crackdown on irresponsible lending.
Post a Comment