This was another Big Lie that affects us all. The real culprits were never Fannie or Freddie but...

[egbertowillies]

Tim Pagliara, author of Another Big Lie: How The Government Stole Billions From The American Dream Of Home Ownership. And Got Caught! exposes 2008 collapse myth.

More about Tim Pagliara:
https://politicsdoneright.com/2021/04/tim-pagliara-author-of-another-big-lie-talks-about-banking-fraud-via-fannie-mae-freddie-mac/

[soothsayer]

1. Yet shareholders are in limbo and Fannie and Freddie are prohibited from paying back their forced

“Loans.”

It’s a weird situation but the government would run out of money more often if Fannie and Freddie were freed from their indentured servitude.

Maybe once corporations pay their fair share, Fannie and Freddie will be freed.

[Warpy]

2. He's a little hazy on his history

What Fannie Mae was set up to do was to hold mortgages for 30 years, making payments affordable. Prior to that, home "ownership" involved putting down a down payment, paying interest for five years or so, then getting hit with balloon payments (which few could make) or having to put down another down payment to renegotiate the loan for another 5 years. It was a neat racket for the banks and made home ownership a sick dream once the frontier and free land were gone.

Once FNMA had backed the loan, a bank would buy a contract to administer that loan. FNMA collected the bulk of the interest payments while the bank collected a fee for doing the accounting to make sure the loan was being paid off.

That worked well for a few decades, but the big banks didn't like seeing 30 years of interest payments going to the government and screamed for privatization. They added layers of alphabet soup to cover what they were doing. Then they screamed about monopoly, and Freddie Mac was set up as fake competition. Banks collected the interest instead of the government and they were happy for a decade or so.

Those big banks went back to their old scam of short term housing loans with balloon payments in the early 00s. The crash of 2008 ended that for a decade, but it's back with a vengeance in hot real estate markets.

FHA was the insurer for the 30 year mortgage, not Fannie Mae. The VA and FmHA also insured mortgages.

I don't know if this guy got taught a lot of ignorant crap in B-school or just prefers to listen to Republicans for his economic history, but half an hour at Wikipedia would have served him a hell of a lot better.

Please fact check this stuff. "Experts" from the right usually aren't.

(Oh, and I'd a lot rather have interest going to the mean ole gummint than down the black hole to a bunch of fat cat bankers)