Okay since you didn't answer the question in the locked thread...

[9ball8]

...And there are business agents in the free market who do use good business practices (common sense, long term perspective, etc) with their associates and customers. That these particular businesses are not actively courted and used as a tool to cleanse the socialist/capitalist (mixed) economy of bad actors, indicates a lack of reflection by government leaders both left and right. It would require active research on the smaller business sector, rather than simply waiting for a lobbyist from a large corporation to knock on an elected official's door with a pre-packaged bill. Applied to the left, I suppose it would be called willful ignorance (or inertia). Still not sure just what has infected the right wing, however.

[Cyclone Ranger]

That's what happens when a government department maintains underwriting standards and expects the "free market" to do the same out of self interest, common-sense and a long-term perspective: it gets abused because an unregulated market confers none of those things on participants.

That's what's known as moral hazard.

[garyd]

Since their creation and before they were spun off as private entities they (Fannie and Freddie) were in the loan guarantee business through FHA and HUD ably seconded by VA. Driven largely by these programs, housing prices have increased by a factor 20 and incidently new house size has increased by 2.5 times.

[Cyclone Ranger]

There is little evidence the prices of exurbian mcMansions and commercial properties were driven in any way by FM/FM. There is a serious mismatch between the types of properties subprime loans were made ro leverage and FM/FM 's footprint.

[garyd]

Nice statement can you back it up? They are both in the hole because the people runing them were paid bonuses based on the numbr of loans written not the quality of the loans written.

FHA and VA underwrote those as well as others and have been for decades. Hud has repossessed as many homes in it's histroy as the banks.