Fannie Mae did not cause the crisis in the American housing market


US mortgage giant Fannie Mae did not cause the crisis in the American housing market, its former boss has told a key Congressional committee.

By the time Fannie Mae had started its riskier loan investments in 2005, “the roots of the present crisis had long taken hold,” said Franklin Raines.

Mr Raines’ comments came in written testimony to the House Oversight and Government Reform Committee.

Fannie Mae and sister firm Freddie Mac had to be bailed out in September.

They were rescued by the government in a move that could cost the US taxpayer $200bn (£137bn).

Giant losses

The two firms are now being administered by the Federal Housing Finance Agency until their long-term future is decided by President-elect Barak Obama’s new administration in the New Year.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: