The GSEs dunnit!

Peter J. Wallison is a critic of the official enquiry into the crash.  For some reason, the government sponsored mortgage insurers went on a loss generating debt buying binge.  It was one of those 'deficits don't matter' policy pushed by unqualified borrowers.  Here is his key point list:

Key Points

• The report of the Financial Crisis Inquiry Commission (FCIC) is frequently cited as the authoritative source for the causes of the 2008 crisis, but its key findings are contradicted by documents in its own files that were never disclosed in its final report.
• By 2008, most mortgages in the US were subprime or otherwise weak. Of these risky loans, 76 percent were on the books of government agencies, principally Fannie Mae and Freddie Mac.
• The FCIC claimed that Fannie and Freddie bought these loans primarily because they were profitable, and not because of the government’s housing policies—particularly the affordable housing goals.
• However, the FCIC documents discussed in this paper show that Fannie and Freddie knew these loans would be unprofitable and in some cases loss-producing.
• As a government study commission, the FCIC failed in its obligation to report fairly on all the evidence it collected, not just the evidence for the story it wanted to tell.