” GSEs and FHA back over 90% of all home loans. Before the mess it was 50%”
The FHA was set up in 1934 to insure loans. Fannie and Freddie didn’t insure any loans at all prior to the Bush administration’s decision to take over the two firms. There was no legal requirement for the government to insure Fannie and Freddie’s paper, it was purely a decision made by the Bush administration.
True, but it was pretty much a given the feds were going to step in.