I’m with a company that placed Fannie Mae Multifamily swaps with AIG up until 1997. None of these have ever defaulted. They never would do single family swaps because Mr. Greenberg would not approve them, mainly because of their LTV, over 80% and the minimum underwriting criteria forced on Fannie Mae by congress for moderate income loans. Greed forced Mr. Greenberg out because he wouldn’t change his way of doing business to make the board richer than they already were.
Danny I agree with you. I believe it was a combination of the repeal of the act, the promotion of subprime mortgages to fulfill the promise of ‘home ownership for everyone’, and the advent of unregulated/unreserved credit default swaps, lax accounting standards and exotic financial derivatives.
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I’m with a company that placed Fannie Mae Multifamily swaps with AIG up until 1997. None of these have ever defaulted. They never would do single family swaps because Mr. Greenberg would not approve them, mainly because of their LTV, over 80% and the minimum underwriting criteria forced on Fannie Mae by congress for moderate income loans. Greed forced Mr. Greenberg out because he wouldn’t change his way of doing business to make the board richer than they already were.
Danny I agree with you. I believe it was a combination of the repeal of the act, the promotion of subprime mortgages to fulfill the promise of ‘home ownership for everyone’, and the advent of unregulated/unreserved credit default swaps, lax accounting standards and exotic financial derivatives.