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<DIV>For those who are not yet bored to death by the subject of Fanny Mae (and
remember, crooked politicians rely on the sheeple to become quickly bored, so
that those on the inside can get away with anything), this seems to be a more
comprehensive overview of all the relevant facts. A short synopsis follows the
link.</DIV>
<DIV> </DIV>
<DIV>Siarlys</DIV>
<DIV> </DIV>
<DIV><A
href="http://www.nytimes.com/2008/10/05/business/05fannie.html?hp">http://www.nytimes.com/2008/10/05/business/05fannie.html?hp</A></DIV>
<DIV> </DIV>
<DIV><FONT color=#00ffff>Fannie, a government-sponsored company, had long helped
Americans get<BR>cheaper home loans by serving as a powerful middleman, buying
mortgages<BR>from lenders and banks and then holding or reselling them to Wall
Street<BR>investors. This allowed banks to make even more loans — expanding
the<BR>pool of homeowners and permitting Fannie to ring up handsome
profits<BR>along the way.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT color=#00ffff>But by the time Mr. Mudd became Fannie’s chief
executive in 2004, his<BR>company was under siege. Competitors were snatching
lucrative parts of<BR>its business. Congress was demanding that Mr. Mudd help
steer more loans<BR>to low-income borrowers. Lenders were threatening to sell
directly to<BR>Wall Street unless Fannie bought a bigger chunk of their riskiest
loans.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT color=#00ffff>Angelo R. Mozilo, the head of Countrywide Financial,
who did not return<BR>telephone calls seeking comment, told Mr. Mudd that
Countrywide had other<BR>options. For example, Wall Street had recently jumped
into the market for<BR>risky mortgages. Firms like Bear Stearns, Lehman Brothers
and Goldman<BR>Sachs had started bundling home loans and selling them to
investors —<BR>bypassing Fannie and dealing with Countrywide
directly.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT color=#00ffff>“You’re becoming irrelevant,” Mr. Mozilo told Mr. Mudd,
according to two<BR>people with knowledge of the meeting who requested anonymity
because the<BR>talks were confidential. In the previous year, Fannie had already
lost 56<BR>percent of its loan-reselling business to Wall Street and
other<BR>competitors.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT color=#00ffff>“You need us more than we need you,” Mr. Mozilo said,
“and if you don’t<BR>take these loans, you’ll find you can lose much more.”
</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV>With that as essential background -- it wasn't exactly an outpouring
of<BR>concern for low income families that wanted to buy homes
which<BR>single-handedly led to disaster, Fannie's response made a
major<BR>contribution:</DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV><FONT color=#00ffff>The ripple effect of Fannie’s plunge into riskier
lending was profound.<BR>Fannie’s stamp of approval made shunned borrowers and
complex loans more<BR>acceptable to other lenders, particularly small and less
sophisticated<BR>banks.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT color=#00ffff>Between 2001 and 2004, the overall subprime mortgage
market — loans to<BR>the riskiest borrowers — grew from $160 billion to $540
billion,<BR>according to Inside Mortgage Finance, a trade publication.
Communities<BR>were inundated with billboards and fliers from subprime
companies<BR>offering to help almost anyone buy a
home.</FONT></DIV></BODY></HTML>
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