Although a little late to the party, Joe Nocera is pitch perfect and comprehensive in today’s NYT column about the mission creep of Fannie and Freddie, which served no purpose other than the enrichment of the mangement (and lucky shareholders who were along for the ride). A particularly trenchant sample:
You want to know the truth about “the mission?” The country doesn’t even need Fannie and Freddie to help with affordable housing. Several laws mandate that banks reinvest in the communities in which they operate — and that mandate has come to be defined largely as making loans available for affordable housing. Several executives involved in community-based banking told me that Fannie and Freddie actually refused to buy those mortgages — they weren’t profitable enough.
