Are you having us all on? The only citation for the claim you are highlighting comes from a mcclatchley article titled "Private sector loans, not Fannie or Freddie, triggered crisis" (
https://www.mcclatchydc.com/news/politics-government/article...) whose thesis is the EXACT OPPOSITE of what you've been arguing in this thread
> As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.
> Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.
> 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.
Furthermore:
> 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.
FURTHERMORE
> But these loans, and those to low- and moderate-income families represent a small portion of overall lending....Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent...During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market.
And then we get to the only 70% in the article:
> fueled demand for mortgage-backed securities, the technical term for mortgages that are sold to a company, usually an investment bank, which then pools and sells them into the secondary mortgage market. About 70 percent of all U.S. mortgages are in this secondary mortgage market, according to the Federal Reserve.
I mean what the hell is going on here? You link to a wikipedia quote which points to an article methodically dismantaling the case you are making, which flatly contradicts the wikipedian citing the article, and whose only connection to your comment is that they both have a "70%" in them, though referring to different things (secondary market dominated by investment banks VS fannie and freddie, NOT THE SAME THING)
> in 2006 that led to Fannie and Freddie losing even more market share in the booming subprime market...mortgage brokers, who also weren't subject to federal regulation or the CRA, originated most of the subprime loans... only one-third of all CRA loans had interest rates high enough to be considered sub-prime
This is honestly the first time on hackernews I've felt like I'm talking to a shill.