Fannie: The downside of the affordable housing push?

There was a big push during the Clinton era to get more Americans into their own homes, under the belief that homeowners made for more stable communities, which is admittedly true. But did the push go too far? The evidence from the subprime market would suggest so. And my BW colleague Dawn Kopecki has a story in this week’s issue of BusinessWeek that raises questions whether Fannie Mae and Freddie Mac are sitting on a pile of bad loans that they were required to make by Congress, which stipulated that both of these government-sponsored enterprises allocate a specified portion of their lending to so-called “affordable loans”—financing provided to low-income individuals who wouldn’t qualify for loans elsewhere.

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