The Wall Street Journal has a story this morning on Fannie and Freddie. The article states they are not innocent in the mortgage mess, but not the lone culprit either. This quote sums up my opinion:
It's important to note that some of the pressure for Freddie and Fannie to lower its lending standards came from banks that were underwriting the loans Fannie and Freddie acquired. The article notes that the mortgage giants' political clout grew as its assets grew. For many years the two companies were too big to fail and this market proved that.
Fannie and Freddie do share some of the blame for the mortgage and housing bust. They recorded a combined $14 billion of losses in the 12 months ended June 30, largely because they lowered their credit standards and purchased or guaranteed dubious home loans.
But "they weren't the leaders in lowering credit standards," said Andrew Davidson, a mortgage industry consultant in New York who has done work for Fannie and Freddie and also criticized them for taking excessive risks. He noted that the worst-performing mortgages are those that were originated by subprime lenders and packaged into securities sold by Wall Street, rather than by Fannie and Freddie. And while loans for low-income people -- programs championed by Democrats as well as many Republicans -- have contributed to Fannie and Freddie's losses, they aren't the biggest part of the problem.