Working Papers

All Their Own Work

FRANKLIN D. RAINES, chief executive of Fannie Mae, May 16, 2000:

It was Congress that chartered Fannie Mae and later Freddie Mac as private shareholder-owned corporations, so Congress deserves the lion’s share of the credit for the successes of the secondary market and the housing finance system today. What Congress did turned out to be absolutely brilliant—it created a system that harnesses private enterprise and private capital to deliver the public benefit of home ownership. And it maximizes this public benefit while minimizing the public risk, and without spending a nickel of public funds.

From Morgenson and Rosner’s Reckless Endangerment.

posted on 13 June 2011 by skirchner in Economics, Financial Markets

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“In July 1999, Andrew Cuomo (Secretary for Housing) proposed stricter requirements for Fannie and Freddie. The share of mortgages to be granted to those earning less than the median income in their area was raised from 42 to 50 percent, and the share that should go to people on very low incomes increased from 14 to 20 percent. The chairman of Fannie Mae, Franklin D. Raines, was very receptive to the new message: “We have not been a major presence in the subprime market, but you can bet that under these goals we will be.”“

Johan Norberg: Financial Fiasco

Posted by .(JavaScript must be enabled to view this email address)  on  06/13  at  06:25 PM

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