You really don't understand what happened do you?
JPMorgan to pay Fannie Mae, Freddie Mac $5.1 billion over mortgage securities
https://www.washingtonpost.com/busin...=.bc930648fc6a
The Nature and the Origin of the Subprime Mortgage Crisis butt ugly old school HTML site but it is pretty much dead on.
The corruption of the loan origination process was the core problem.
Quote:
Nine of the top 10 lenders were based in California, including all of the top five: Countrywide Financial Corp., Ameriquest Mortgage Co., New Century Financial Corp., First Franklin Corp., and Long Beach Mortgage Co.
Altogether 56 percent of the $1.38 trillion of subprime mortgages in the study period were written by California firms.
Some lenders allowed borrowers to state their incomes without providing documentation.
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The loan originators sold the loans to big banks who sold off crap loans to the government but continued to service the loans for a fee, then the loans were packaged into securities and sold off to investors as sub-prime loan pools when default guarantees. These former-government agencies, probably through incompetence (major fraud?), had a major role also. AIG almost failed because of credit default swaps insured with securitized mortgages
https://insight.kellogg.northwestern...t-wrong-at-aig
What Went Wrong at AIG?
Unpacking the insurance giant's collapse.
Based on the research of Robert McDonald and Anna Paulson
They all made money until the scam collapsed and the government, really the taxpayer, got stuck paying for most of the loss.
So much for successful privatization of government agencies ...
Privatizing Social Security will make this look like a cake-walk.