Quote:
Originally Posted by Ice
The thing is though, Fannie Mae and Freddie Mac aren't supposed to buy subprime mortgages. Companies that legally purchase subprime mortgages know they're buying crap. Which is why they get them for 30 cents on the dollar (or even less in some cases) when purchased from B paper or lower lenders. Both Fannie Mae and Freddie Mac were only allowed to purchase, package and sell conforming loans, which have very strict underwriting and ratio guidelines. If they have the same crap neg am loans that they packaged and sold, that's a whole new corruption investigation that needs to be started.
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I heard the loans were packaged into large groups, and somehow passed off as as solid loans when packaged that way. I don't know exactly how this worked...perhaps someone can expand on this if true?