8537
VIP Member
"most people" don't define "conforming". In this case, The Bush administration and Congress changed the standards of what conforms. No one ever claimed that no subprimes were conforming - many were. But the most toxic were not, nor were the highest valued. Those loans were still sold only in the private market.No, that's not true. FM and FM don't buy nonconforming loans. Period. End of story.
Correct. Freddie and Fannie do not buy non-conforming loans.
Is that because they changed the definition of what a conforming loan is, or is it because you do not want to admit that you might not know all the facts?
Fannie Mae aimed to benefit from subprime loans and expand the market for them -- and hoped to pass much of the risk on to others, documents show. Along with subprime loans, which were typically issued to borrowers with blemished credit, the company targeted so-called Alt-A loans, which were often made with no verification of the borrower's income.
"By entering new markets -- especially Alt-A and subprime -- and guaranteeing more of our customers' products at market prices, we met our goal of increasing market share from 22 to 25 percent," Mudd wrote in a 2006 year-end report to the Fannie Mae board dated Jan. 3, 2007.
In other internal documents, there was a common refrain: One of Fannie Mae's objectives for 2006 was to "increase our penetration into subprime."
In an interview, Fannie Mae Executive Vice President Thomas A. Lund said the company pursued the purchase of subprime loans in 2006 and 2007 at the request of lenders, who wanted Fannie Mae to take the loans off their books. He said Fannie Mae hoped to bring higher standards to the market, and he added that the loans helped the company in its struggle to meet goals the government had set for Fannie Mae's advancement of affordable housing.
Fannie's Perilous Pursuit of Subprime Loans - washingtonpost.com
Funny thing, most people would define both subprime and Alt-A loans as non conforming.