Ferchi

When the bubble burst in the fall of 2008, Republicans immediately pinned the blame on Fannie and Freddie. John McCain, then running for president, called the companies "the match that started this forest fire." This narrative picked up momentum when Wallison joined forces with Ed Pinto, Fannie's chief credit officer until the late 1980s. According to Pinto's research, at the time the market cratered, 27 million loans-half of all U.S. mortgages-were subprime. Of these, Pinto calculated that over 70 percent were touched by Fannie and Freddie-which took on that risk in order to satisfy their government-imposed affordable housing goals-or by some other government agency, or had been made by a large bank that was subject to the CRA. "Thus it is clear where the demand for these deficient mortgages came from," Wallison wrote in a recent op-ed in The Wall Street Journal, which has enthusiastically pushed this point of view in its editorial section since the crisis erupted.