March 4, 2024

Does Fannie Mae and Freddie Mac Matter?

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I had quite the discussion with a coworker yesterday morning.  He’s buying the line that Sen. Obama used that deregulation is one of the main causes of the current financial crisis.

I believe that while it may be the enabler of the crisis, it did not cause it.  Bad loans caused it, and there were some that encouraged bad loans, and some that wanted oversight into what was going on.

My question is, will anyone connect what happened here with Sen. Obama and big government “solutions”?

Hat tip: Say Anything

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2 thoughts on “Does Fannie Mae and Freddie Mac Matter?

  1. There were many causes of the financial crisis, but chief among them was the belief that home prices would continue to climb forever. This belief was shared by all, including most of all consumers. Congress encouraged loans to those unqualified to handle the payments in the name of diversity. The democrats discouraged regulation of Freddie and Fannie, which contributed to the problem. At the end of the day, however, we have become a country of over-consumption, and the results aren’t pretty.

    DRs last blog post..How to Survive (and Thrive) in a Recession

  2. Better regulation is needed of lender such as Fannie Mae and Freddie Mac. They need to be completely reformed in such a way that there is a clear logive to there lending which will minimize the amount of defaulted loans.

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