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- November 12, 2011 at 8:01 am #376862AnonymousInactive
Fannie Mae and Freddie Mac made 54 percent of the “subprime” mortgage loans from 2002 to 2007, or about $ 1.9 trillion in mortgage loans to borrowers with credit scores lower than 660.
The report comes after Rep. Barney Frank (D-Mass.) – who fought against regulation of the two quasi-public mortgage giants — and Rep. Anthony Weiner (D-N.Y.) wrote a letter in June to Fannie Mae and Freddie Mac calling on the GSEs to lower lending standards on condo buyers.
Fannie and Freddie were not subject to regulation by the Securities and Exchange Commission, while executives were paid well. Former Fannie CEO Franklin Raines earned more than $ 50 million in compensation during his six-years at the helm, the report says. Fannie and Freddie paid billions more to shareholders. “Thus, the government subsidizations of GSE operations amounted to little more than corporate welfare,” the report says
1) So should people with credit scores lower that 660 be allowed to continue to purchase homes? Obviously they can’t pay the mortgage.
2) Should Freddie and Fannie be put under scrutiny of the SEC
3) Should these GSE be privatized and shut down if they cannot turn a true profit?
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