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It looked good at the time….

Yehoram posted a link on myREINspace to a New York Times article from September 1999 about Fannie Mae yielding to pressue and making it easier for some borrowers. The high points:

…banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. 

And

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.

I think I’m going to go read about the 1980’s rescue now….

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