Here's a link to an article from 1999 warning of the risks in bad economic times.
http://query.nytimes.com/gst/fullpag...p=1&sq=&st=nyt
Quote:
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
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Wow, someone saw the writing on the wall.
Also, the pressure from the Clinton Administration to expand mortgage loans among low and moderate income people opened up can worms...