As many commentators have noted, there are a number of things to be mad at the GSES about—their use of political clout to ward off oversight, their mid-2000s accounting scandals, their purchases of Wall Street-created subprime securities, their huge losses caused by the sheer size of their portfolio, etc.—but data show they never bought subprime mortgages per se. They did buy Alt-A (poorly documented) loans, but did so late, most aggressively in 2006, and only after losing market share to the private sector, which had vastly expanded and dominated the subprime/Alt-A market. And even after they lowered standards, the loans the GSES bought or backed significantly outperformed those in the private sector: Even for a subset of borrowers with similar credit scores—below 660—FCIC data show that GSE mortgages were far less likely to be seriously delinquent than were non-GSE securitized mortgages: 6.2 percent versus 28.3 percent, as of the end of 2008. Online readers can find more in the FCIC report and in condensed form in columns by Bethany McLean and Joe Nocera.

As for the CRA, the argument for the centrality of a 1977 law in a mortgage boom three decades later is even more far-fetched, but suffice it to say that the FCIC found that only 6 percent of all “high-cost” (subprime) loans had any connection to the law, which didn’t even cover some of the worst actors—non-banks like Ameriquest, Countrywide, and the rest.

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