Ok, for those who haven’t figured it out yet, Freddie Mac and Fannie Mae had an awful lot to do with the meltdown in the housing market. Since they were “quasi-governmental” bodies (that means, backed by Federal Government $$ but not entirely run by the government), people were willing to buy the overpriced repackaged mortgages they were selling — full of no-doc, interest only and those strange “pick your payment” loans, confident that “the government” would never let Fannie and Freddie fail. And here they are still today!
Now, on to today’s news, the Obama Administration is going to allow state governments to issue housing bonds backed by Fannie and Freddie. Read that again, and then go to the full story over at The Hill. It’s truly mind-boggling.