"John R. Carroll" wrote in message
...
CRA loans have the lowest default rate of any mortgages Tom.
I guess you really are just stupid after all.


As stupid as you loosing all your assets in risky, questionable investments?
I don't think so!

The GSE business model faces inherent conflicts due its combination of
government mission and private ownership. According to the American
Enterprise Institute, a conservative think-tank: "The government mission
required them to keep mortgage interest rates low and to increase their
support for affordable housing. Their shareholder ownership, however,
required them to fight increases in their capital requirements and
regulation that would raise their costs and reduce their risk-taking and
profitability. But there were two other parties--Congress and the
taxpayers--that also had a stake in the choices that Fannie and Freddie
made. Congress got some benefits in the form of political support from the
GSEs' ability to hold down mortgage rates, but it garnered even more
political benefits from GSE support for affordable housing."[15]

In 2003, the Bush Administration sought to create an agency to oversee
Fannie Mae and Freddie Mac.[16] While Senate and House leaders voiced their
intention to bring about the needed legislation, no reform bills
materialized. A Senate reform bill introduced by Senator John Corzine (D-NJ)
(S.1656) never made it out of the 21-member (10D/11R) Senate Banking,
Housing, and Urban Affairs Committee.[17]. At the time members of the 108th
congress expressed faith in the solvency of Fannie and Freddie. Congressman
Barney Frank (D-MA), for example, described them as "not facing any kind of
financial crisis." [18]

In 2005, the Federal Housing Enterprise Regulatory Reform Act, sponsored by
Senator Chuck Hagel(R-NE) and co-sponsored by Senators Elizabeth Dole
(R-NC), John McCain (R-AZ) and John Sununu (R-NH)[2], would have increased
government oversight of loans given by Fannie Mae and Freddie Mac. Like the
2003 bill, it also died in the Senate Banking, Housing, and Urban Affairs
Committee, this time in the 109th Congress. A full and accurate record of
the congressional attempts to regulate the housing GSEs is given in the
Congressional record prepared in 2005. [19][20]

Gerald P. O'Driscoll, the former vice president of the Federal Reserve Bank
of Dallas, stated that Fannie Mae and Freddie Mac had become classic
examples of crony capitalism. Government backing let Fannie and Freddie
dominate the mortgage-underwriting. They returned some of the profits to the
politicians, sometimes directly, as campaign funds, and sometimes as
"contributions to favored constituents." [21]