The New Fannie And Freddie: Flim And Flam

"The long-standing and profitable operation of housing GSEs -- their purchases of home-loans financed out of bond sales to the public at cheap rates because of the implicit government backing they enjoyed -- generated a long-sustained upward spiral in home prices, reduced aggregate risk perceptions in home finance among private lenders, and attracted capital including foreign savings. That made Fannie and Freddie a part of the constellation of government policies that promoted a steep home price bubble -- that eventually burst to deliver the Great Recession."