Think Independently, Don't Follow the Herd

Here is a prime example of the misinformation, which the media has used to mislead the American public to believe Fannie Mae and Freddie Mac were the cause of the 2008 subprime mortgage crisis. The facts about the subprime crisis clearly contradict many of the false assumptions.

Please take the "Restore Fannie Mae" Favorability Survey to learn more about the facts.

Don't just take our word for it, take a look at the paper published by the FED regarding their findings, based on statistical data, showing that neither government policies, nor the GSEs themselves caused the subprime crisis, and in many cases the polices created more favorable conditions than the communities with dominant, private sector, bank lending.


“We have known for years that Fannie Mae and Freddie Mac played central roles in the 2008 financial crisis and the right policy course is to be phase them out,” said AAF President Douglas Holtz-Eakin regarding the findings. “It is fascinating to see that, across party lines, the public also shares this view.”

"Coming out of the financial crisis of 2008, Fannie and Freddie took on the role of central villains and have not recovered. The public image of these two entities is nearly toxic!"

"These arguments are particularly potent in shaping public opinion on Fannie and Freddie."

"Among other findings, when informed that Fannie and Freddie played an instrumental role in the housing bubble and received nearly $200 billion dollars in a bailout, voters’ opposition to Fannie and Freddie moves to 59%, including even 51% of Democrats."



1. Fannie Mae and Freddie Mac continue to win lawsuits against the major banks for fraud and misrepresenting the quality of mortgage-backed securities sold to Fannie and Freddie, leading up to the financial crisis of 2008. These banks violated federal securities laws and common laws in the sale of residential private-label mortgage-backed securities (PLS) to the enterprises, which totaled nearly $200 Billion. 




2. "Most early estimates showed that the subprime mortgage boom and the subsequent crash were very much concentrated in the private market, not markets or charters set out by Fannie Mae and Freddie Mac. According to an estimate made by the Federal Reserve in 2008, more than 84 percent of the subprime mortgages came from private lending institutions in 2006."


3. The majority of the Financial Crisis Inquiry Commission (6 of the 10 members) reported in 2011 that Fannie & Freddie "contributed to the crisis, but were not a primary cause."


4. “From 2002-2005, Fannie and Freddie saw a fairly precipitous drop in market share, going from about 50% to just under 30% of all mortgage originations. Conversely, private label securitization (Banks) shot up from about 10% to about 40% over the same period. This is, to state the obvious, a very radical shift in mortgage originations that overlapped neatly with the origination of the most toxic home loans.”


5. "Housing goals do not appear to have played a significant role because Fannie and Freddie remained less concentrated in low-income market segments compared to the private market. Still, the high LTV, low FICO score, and alternative documentation loans that Fannie and Freddie purchased are performing significantly better than private subprime loans, suggesting the enterprises retained stronger risk management procedures than private financial companies."


6. "Mortgages originated for private securitization defaulted at much higher rates than those originated for Fannie and Freddie securitization, even when controlling for all other factors (such as the fact that Fannie and Freddie securitized virtually no subprime loans). Overall, private securitization mortgages defaulted at more than six times the rate of those originated for Fannie and Freddie securitization."





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