Fannie and Freddie Loaded Up on $3.17 Trillion in Subprime and Alt-A Loans & Securities 2002-2007
From 2002 to 2007, Fannie Mae and Freddie Mac loaded up on $1.73 trillion of subprime and $1.44 trillion of Alt-A loans and securities, taking the lion's share of these markets, according to mortgage market guru Edward Pinto. The agencies' share of these riskier loans and securities, then, was higher than the total for all private label mortgage-backed securities held outside the agencies' purchases -- contrary to widely-held views in the mortgage industry. The two agencies hid the level of risky lending and investment in securities by failing to classify most of the loans initially as subprime or Alt-A. By Robert Stowe England MindOverMarket.blogspot.com October 10, 2009 On Thursday, October 8, at a hearing before the Senate Finance Committee, Senator Robert Menendez (D-N.J.) asked Edward DeMarco, acting director of the Federal Housing Finance Agency, how much subprime was loaded onto the balance sheets of Fannie Mae and Freddie Mac. DeMarco indicated that the Government-S...