Submitted by hardmanb, Sep 16, 2008 11:50

In all the finger-pointing, I have yet to see anyone realizing the impact of well-intentioned "do-goodism" by social "progressives" in Congress. "What happened to Freddie and Fannie? Mark Hoonsbeen, a principal with Edina-based Nicollet Investment Management, says their failure was caused by a combination of factors -- mismanagement and misguided priorities exacerbated by the subprime mortgage crisis. The other problem, Hoonsbeen said, was that Congress changed their mandate to finance more mortgages from lower-income applicants. The new goals increased the percentage for low- and moderate-income applicants from 50 percent in 2004 to 56 percent in 2008; it increased the percentage for special affordable housing (for very-low-income individuals) from 20 to 27 percent, and it increased the percentage for underserved areas from 31 to 39 percent. When defaults and foreclosures -- particularly among low-income homeowners -- began to skyrocket, Fannie and Freddie were hit hard.

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