Fannie Mae Cause Problems in the Future

My buddy Chris stumbled across an interesting little tidbit from the New York Times, dated nine years ago today -- September 30, 1999. It's an article that was published regarding the relaxation of credit requirements for companies like Fannie Mae to purchase loans. And it very eerily foreshadows the state of affairs today:

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'

The full article can be found here, and it's quite an interesting (and short) read.