|Edward Pinto, Former Chief Credit Officer of Fannie Mae|
He says the government owned 71% of the sub-prime mortgages outstanding in 2008.
But based on the number of toxic loans in the system in 2008, the government was responsible for not just a simple majority, but more than two-thirds. It's quantifiable — 71% to be exact (see chart). And the remaining 29% of private-label junk was mostly attributable to Countrywide Financial, which was under the heel of HUD and its "fair-lending" edicts.Most of the sub-prime mortgages were owned by Fannie Mae, Freddie Mac, HUD and the VA. That's pretty definitive. So, why is this data so hard to come by, and why are the Occupy Your Street hippies still clueless? Blame the Government and the Main Stream Media. IBD continues to light our path on this topic (emphasis mine):
To be fair, the blame-Wall Street narrative has cemented in the public consciousness, and is hard to crack. That's because in the wake of the crisis, the Obama White House and Pelosi-Reid Congress engineered a cover-up of Washington's role in the mess through the Democrat-led Financial Crisis Inquiry Commission. The national media now defer to it as the final authority on what caused the crisis and ensuing recession.
While not blameless, Wall Street is an easy scapegoat. And investment houses that made billions slicing and dicing mortgages into CDOs, derivatives, credit default swaps and other exotic paper are easy to demonize. But the problem wasn't these financial instruments. Or even the obscene profits they generated.The bottom line: Wall Street is happy to take profit when they can, where they can, how they can. Expect it, know it, own it, greed is human nature. The shocker to OYS hippies is the U.S. Government is truly to blame for the mess, Wall Street only carried water for the well-meaning but ultimately fatally flawed policies of wealth re-distribution. Some of us have known this since 1946.
Mortgage-backed securities were nothing new, and we've always had speculation in the market.The problem was the underlying assets: low-quality mortgages. We've never had so many junk home-loans poisoning the financial well before. And who poisoned the well? Washington and its affordable-housing policies.
It was Washington that declared prudent home-lending standards racist and gutted traditional underwriting rules in the name of diversity. It was government that created the risk on Main Street. Yes, Wall Street spread it, with the help of Treasury-backed Fannie and Freddie. But who's at greater fault for harming the village — the person who poisons the well or the one who distributes the water?
Now you know that, too.