Industry News

Fannie, Freddie oversized egos

Opinion: Hubris comes back to haunt the F brothers

Funny as it may sound: Fannie Mae and Freddie Mac were at the right place at the right time, at the nexus of the greatest demographic bulge of homeownership demand in the history of the world. One hundred million monied boomers and eager immigrants trampling over one another in the last 20 years to get a piece of the great American Dream (and subsidy, we might add). Thank God the F brothers were well managed to take advantage of the explosion in housing growth and prosperous enough to keep the market liquid enough to handle the demand. Today, when Fannie and Freddie testify before the U.S. Congress, we expect an eloquent defense of their role. But hubris also set in, we remember years ago when Fannie began behaving like it was extra-special and throwing money around every which way to gain political and media favor. We are not suggesting that it illegally bribed anyone, but the Fannie Mae Foundation was certainly used to gain favor with U.S. Congressmen when they doled out local gran...