vanyali

Fannie and Freddie: We All Support You!

The reason the GSE's owned any subprime paper was because the government was leaning on them to do more to support "affordable housing", and they figured that buying some of the more insulated traunches of offerings backed by subprime mortgages was the cheapest and safest way to do that. So, in summary, they own subprime because the government told them to buy it.