To a liberal, everything is to gain political points. Since Billy Clinton signed these laws into effect, regardless if they do or do not have merit, there is no political gains to be made. Thus, you won't hear from them.
One reason I was not responding was because I'm more into Science and Technology, and Theology, than I am into accounting and numbers. I have learned far more about this topic than I had ever hoped to, yet... I'll give it my best shot.
Hmm... I must be missing something. I was under the impression that the market followed Fannie and Freddie, not the reverse. In fact, it wasn't until the mid 90s when the feds started pushing for more home loans, through their sponsored corporations, that sub-prime loans began to rise.
Is not the vast majority of the loans that have gone bust, been loans from Fannie and Freddie? Cheap low interest loans from Fannie and Freddie are what caused the bubble to exist. Without them, the private bank, most of whom didn't make sub-prime loans, would never have had the wide ranging power to create a bubble.
That doesn't even follow logic. Fannie and Freddie where chocked full of sub-prime Securitization. There was more regulation on outside investment banks, than was on F&F.
What? 
So if a bank doesn't merge with an insurance company... then it won't engage in predatory lending practices? Not logical.
In the end, the sub-prime melt down, is due to two people. Lenders... Borrowers...
First, Borrowers. A bunch of people choose to get loans they could not afford, on the bet that they could refinance them, due to increasing home values, before the sub-prime loan ballooned or adjusted. They gambled a loan on the economy and rising home values. Like any gamble, eventually you lose. The home values didn't rise as planned, the economy slowed down slightly, preventing them from refinancing, and when their sub-prime loans adjusted or ballooned, they were crushed financially.
Solution: Flat out, don't borrow money unless you know you can pay it back. I'd even say, never borrow money at all, but if your going to, make for sure that you can pay it off in the condition you are presently in. Not some theoretical future situation that doesn't exist yet. Doing so is playing with a snake, and your going to get bitten.
Second, the Lenders. You really don't need regulation on lending because if a lender gets burned enough loaning money to people who can't pay back, they'll be broke and out of business, or they'll figure out not to loan to people who can't pay back.
Now based on what I understand of how the market works, Fannie and Freddie have the greatest, most wide ranging influence in the industry. If they had been required to follow the standards the rest of the market has to, I wager very little of this would have happened. It's because they set the tone by offering secruitizing for loan that were sub-prime, at low interest rates, that caused the rest of the industry to believe it could follow the same pattern.
I'm way out of my zone, so if I'm wrong please do tell. Explain it if you can.
