"...Wallison’s theory... not...reality....Fannie and Freddie...spent most of the housing bubble avoiding subprimes.... finally did get in... very late in the game... pressure from the marketplace... the subprime companies and Wall Street had long used subprime loans as a way to do an end-run around Fannie and Freddie. By the mid-2000s, subprime underwriting and securitization had become so profitable — and such a large part of the overall mortgage business — that Fannie and Freddie felt they had no choice but to dive in. In other words, the G.S.E.’s were reacting to the realities of the market, not to the government. They were worried about losing market share."
See also Frank Rich's editorial today, touching also on the FCIC report. RICH WRITES A GREAT EDITORIAL EXPOSE,
THE BIPARTISAN RACKET. Readers should follow up Rich's references to other sites; very revealing in the usual way.
I also recommend Michael Lewis' book The Big Short on the subject.
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