2015-01-14

Fwd: Subprime

Any serious effort to understand the crisis would have asked at this point why government agencies held so many subprime and other risky mortgages, and that inquiry would have turned up the affordable housing goals, adopted by Congress in 1992. These required Fannie and Freddie, when they bought mortgages from banks and other originators, to meet a quota: 30 percent of those mortgages had to be made to borrowers at or below the median income in the communities where they lived. Data from HUD, which administered the goals, would have shown the administration and Congress, had they been curious, that HUD had gradually increased the quota to 50 percent in 2000 and to 56 percent in 2008.

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