THE POORLY PLAYED BLAME GAME…. To hear conservatives, most notably John McCain, tell it, four not-so-simple words explain the entire financial meltdown: “Fannie Mae, Freddie Mac.”
David Goldstein and Kevin G. Hall have a terrific item for McClatchy that sets the record straight.
Federal housing data reveal that the charges aren’t true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.
Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height vrom 2004 to 2006.
Federal Reserve Board data show that:
* More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
* Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
* Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that’s being lambasted by conservative critics.
Yglesias added, “You expect a certain amount of dishonesty in politics. But you would think that amidst a bona fide emergency situation whose consequences threaten everyone’s well-being that conservatives would try to pay some attention to what’s actually going on.”
That would be nice, but it’s clearly not happening.