WSJ: FANNIE & FREDDIE A SMALL PART OF THE PROBLEM

This is from the Wall Street Journal, so it will be hard for the wingnuts to argue that it's from a liberal source:

Fannie, Freddie Share Spotlight in Mortgage Mess
Government-Backed Mortgage Giants Are Targets in Political Debate Over What Sparked the Housing Bust

By JAMES R. HAGERTY
OCTOBER 16, 2008
Wall Street Journal

Fannie and Freddie do share some of the blame for the mortgage and housing bust. They recorded a combined $14 billion of losses in the 12 months ended June 30, largely because they lowered their credit standards and purchased or guaranteed dubious home loans.

But "they weren't the leaders in lowering credit standards," said Andrew Davidson, a mortgage industry consultant in New York who has done work for Fannie and Freddie and also criticized them for taking excessive risks. He noted that the worst-performing mortgages are those that were originated by subprime lenders and packaged into securities sold by Wall Street, rather than by Fannie and Freddie. And while loans for low-income people -- programs championed by Democrats as well as many Republicans -- have contributed to Fannie and Freddie's losses, they aren't the biggest part of the problem.

Fannie's main problem is from Alt-A loans, not sub-prime:

Fannie has said that 50% of its credit losses in the second quarter came from Alt-A loans, which generally go to borrowers with good credit records who don't fully document their income. Fannie officials have said Alt-A loans make up the company's biggest problem area. Fannie has said that about 17% of its Alt-A loans were to real-estate investors and 32% financed homes in California and Florida, where home prices have plunged.

What's particularly sweet is the fact that St. Raygun helped Fannie in the 80s:

Meanwhile, Fannie got a little help from the Reagan administration. As losses ate into Fannie's capital, HUD in 1982 allowed the company to raise its borrowings to 30 times capital from 25 times. HUD called the move "prudent" and said it would help Fannie support the housing market.