How are Fannie and Freddie linked to the housing crisis and why did they do it?
By April 2008, according to a document prepared for then-Fannie Mae CEO Daniel Mudd and marked “Confidential — Highly Restricted,” Fannie’s $312 billion in Alt-A mortgages represented “12% of single-family credit exposure.” This book of business, the document notes, “was originated to maintain relevance in market with customers — main originators were Countrywide, Lehman, Indymac, Washington Mutual, Amtrust.” The first four need no introduction; regulators ordered Ohio-based Amtrust to stop lending two weeks ago.
