"In Washington," the New York Times reports, "Fannie and Freddie’s sprawling lobbying machine hired family and friends of politicians in their efforts to quickly sideline any regulations that might slow their growth or invite greater oversight of their business practices."

The lobby made sure that Fannie and Freddie would not have to meet the same financial standards or endure the same tax burdens as their competitors, and that government guarantees would stick the taxpayers for any losses they incurred. The companies did not offer home loans. Instead, they bought mortgages from banks, and accepted the risk of defaults. This allowed the banks to issue more and more mortgages.

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