More of what got us to our financial meltdown in housing

Have you noticed that the GSEs Fannie and Freddie are front and center of the stimulus?

"Before Wall Street screamed bloody murder at the opening of 2008, President Bush was resisting pressure to lift the financial limit on the mortgages Fannie Mae and Freddie Mac purchase and securitize. The Office of Federal Housing Enterprise Oversight (OFHEO), the GSEs’ wimpy watchdog, also objected to lifting the limit and continues to do so post stimulus agreement. The present GSE limit is $417,000. The stimulus would snap the cap to $625,500, and to $729,750 in extra pricey housing markets. Allowing Fannie and Freddie to purchase and securitize jumbo mortgages, the oversize loans MBS investors now shun as too risky. Link

How we got here--a quick review



HT Taxmanblog