This is where Fannie Mae and Freddie Mac came in. The former was founded in 1938 and turned into a publicly-owned, government-sponsored enterprise (GSE) in 1968. The latter was founded as a GSE in 1970. Both were designed to expand the … Fannie Mae and Freddie Mac were prepared to buy these loans as well, and this meant lots of work and income for the rating agencies as long as they went with the flow and refrained from acknowledging that what was going on was a scam . …

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