This link has been bookmarked by 9 people . It was first bookmarked on 05 Oct 2008, by Jon Alexander.
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14 Jan 11
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A nonfeasant Fed, that ignored lending standards, and ultra-low rates.
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This nonfeasance under Greenspan allowed banks, thrifts, and mortgage originators to engage in all manner of lending standard abrogations.
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"As Freddie Mac Chairman and CEO Richard Syron recently put it, the GSEs have been hit by a "100-year storm" in the housing market, accentuated by some higher-risk mortgages that they were forced to buy to meet government affordable-housing targets.
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• Competitors were "snatching lucrative parts" and market share away;
• Between 2001-04, the subprime mortgage market grew from $160 to $540 billion
• Between 2005-08, Fannie purchased or guaranteed at least $270 billion in loans to risky borrowers.
• By 2004, Fannie had lost 56% of its loan-reselling business to Wall Street;
• Angelo Mozilo, Countrywide Financial CEO, the nation’s largest mortgage lender, threatened to end their partnership unless Fannie started buying Countrywide’s riskier loans;
• Congress was pressuring for more loans to low-income borrowers;
• Hedge fund managers and other investors pressured Fannie executives that the company was not taking enough risk in pursuing profits;
• Like many other firms, Fannie’s computer systems did a poor job of analyzing risky loans;
• Between 2005-07 -- afte rthe market's peak -- Fannie's acquisitions of mortgages with less than 10% down payments almost tripled;
• Fannie expanded in hot real estate areas like California and Florida;
• From 2004-06, Fannie operated without a permanent chief risk officer;
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28 Jul 10
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06 Oct 08
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05 Oct 08
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