Quote:
Originally Posted by Rick Lee
The article does not specify when that paper was bought. AFAIK, Fannie and Freddie never had any guidelines for underwriting subprime mortgages. Subprime is, by definition, the kind of credit bucket that could not go conventional or Alt A. However, the article does show that Fannie's and Freddie's subprime holdings seem to be performing pretty well. So my guess is that they bought up this stuff after subprime had ceased to exist as a loan origination vehicle. Contrary to popular belief, the vast majority of subprime mortgages are still performing just fine. The problem is that no one can get these loans anymore and that brought rising values to a screeching halt. |
Well, it was at least prior to May of 2007 so I don't think it was after too recent.