Raines was disgraced by his own enormous greed and lack of character. But those crimes are merely an afterthought to the real damage he brought to our economy.
Raines was instrumental in building Fannie's mortgage portfolio to gargantuan proportions. And he was responsible for the company's move into subprime loans.
Rather than lend money to homeowners, Fannie's strategy was to buy mortgages from banks, which allowed them to banks to more homeowners. Fannie Mae also guaranteed mortgage loans across the industry, which allowed more private capital to become available. The theory was this made housing more affordable. It didn't. It only allowed banks to make risk-free loans, which led to vastly higher home prices, bigger banking profits, and huge profits for Fannie Mae at least temporarily. The downside was the whole system was a charade... a giant con job. Fannie never had the capital required to guarantee the loans it bought and insured. When the bubble inevitably popped, the U.S. taxpayers ended up footing the $500 billion bill." Source: Stansberry & Associates Investment Research - June 2011
Did the government programs and Raines at Fannie Mae make housing affordable? Answer is no....it only inflated the housing costs for all people. Now people are losing their houses thanks be to the big government program. Big government and big business are for the elite; they want to control and do control the masses. But notwithstanding what they say, they hurt the small and little guys......the serfs. Nothing really changes, history repeats, but the ways are just bit different.
Piracy sails from high seas to C-suite Outside the Box - MarketWatch
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