Republican members of the Financial Crisis Inquiry Commission, in a new report, blame government policies of providing mortgage credit to underserved borrowers as being a chief ingredient behind the nation's housing bubble.
Released late Wednesday, the report — which preempts a full committee report due out shortly — also singles out Fannie Mae and Freddie for being "instruments" of the same U.S. government policy of supporting housing.
The GOP members of the committee, in their "primer" on the crisis, blame the Clinton and George W. Bush administrations for subsidizing mortgages (using the GSEs) saying it "was a particularly politically expedient way to increase the homeownership rate."
They refer to Fannie and Freddie as "two enormous monoline hedge funds" whose "only option available was to invest in mortgage of increasingly lower quality and higher risk to the taxpayer."
The GOP commissioners of the 10-person FCIC issued their own report because they felt the Democratic majority is limiting its views on the crisis.
