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Oh, and another thing. If you’re going to invent economic history, at least go to the trouble of making it remotely plausible. From your account above, you seem to harbor the belief that banks could sell their loans to Freddie/Fannie “if things went bad”. So you don’t even know the basics of how Freddie/Fannie worked!! Not that it would bother you, I suppose.</p>
<p>In fact, Freddie/Fannie buy loans after issuance. Their role was to return the money to the banks so that instead of having their capital tied up for 30 years while the loan was repaid, they would get it back and could make another loan. They buy the loans, period, not “if things went bad” like a gov’t sponsored insurance company.</p>
<p>About the only thing soccerguy left out of his account that the right wing believes is that in the end its the fault of minorities. See, the gov’t (they claim) was pushing banks to make bad loans they didn’t want to make so minorities could qualify for them. Or is that saved for your follow-up post?</p>