Still, as the Journal points out, Alt-As were still a small part of their business even though they made up a big part of the losses.
Yet both companies expanded their exposure to riskier loans. At both Fannie and Freddie, so-called Alt-A loans, a category between prime and subprime, accounted for roughly 50% of credit losses in the second quarter, even though such loans accounted for only about 10% of the companies’ business.
In truth, it is the ocean of toxic-waste mortgages funded and sold by Wall Street that ultimately has put taxpayers at risk.
Some context just seems in order.