I'm sure y'all have seen this link floating around the Internet's already but I wanted to have this here for posterity. Below is an excerpt from a 1999 article in the New York Times by Steven Holmes titled Fannie Mae Eases Credit To Aid Mortgage Lending 

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

…

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.''

Although the article is particularly prescient there is one thing it didn't predict, which is how much this risk of failure would be compounded while remaining hidden due to the rise of Mortgage Backed Securities. Still, it is definitely interesting reading to see that someone called the current clusterfuck as far back as 1999.

Way to go Clinton administration, as always the road to hell was paved with good intentions.

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