Fannie Mae and Freddie Mac caused the credit crisis. This fact is not in dispute. They are known as GSEs (Government Sponsored Enterprises) and they don't make home loans; they make it easier for banks and other mortgage lenders to do so. Why, you might ask, would Fannie and Freddie make unsound loans? As always, it comes down to money and politics. It so happens that the compensation of their CEOs was tied directly to the achievement of earnings targets, and their CEOs made substantial campaign contributions to their pals in Congress.
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