“In the years before 2007, “the market was so frothy then it was hard to find good quality loans to securitize and hold in your portfolio,” said David Felt, a lawyer who served as deputy general counsel of the finance agency until January 2010. . . .
Fannie and Freddie had other reasons to buy the securities, Mr. Rood added. For starters, they carried higher yields at a time when the two mortgage giants could buy them using money borrowed at rock-bottom rates, thanks to the implicit federal guarantee they enjoyed.” (New York Times)
Subprime-pushing regulators, a government-protected investment-rating cartel, mortgage giants that keep profits but can dump losses on taxpayers . . . but heck, let’s blame just the banks.
FEE Timely Classic
“Bailing Out Statism” by Sheldon Richman