From The Washington Examiner, Conn Colin’s column (say that three times fast) “Facts show Fannie, Freddie led mortgage market to the collapse“:
From 1992 through the height of the housing bubble, Fannie Mae and Freddie Mac used their monopoly position in the mortgage securitization industry to reward firms like Countrywide for making bad bets in the housing market. Countrywide’s success was a signal to other market participants to lower their standards as well.
Wall Street banks are not blameless for the financial crisis. But they were only responding to the incentives set up by the federal government. Ignoring this history will help no one.
But ignore it they will. It does not fit The Narrative™.
RTWT. The .gov set up the conditions, the lenders ran with it. If they didn’t they’d have been penalized by the .gov. Once one major lender did it, everybody did it. Why wouldn’t they?