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How Nixon Expanded Fannie Mae’s Footprint
http://blogs.wsj.com/developments/2012/09/21/how-nixon-expanded-fannie-maes-footprint/?mod=WSJBlog&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fdevelopments%2Ffeed+%28WSJ.com%3A+Developments+Blog%29In a maneuver to get Fannie Mae’s debt off the government’s books, President Lyndon Johnson in 1968 signed legislation transforming the mortgage agency into a company owned by private shareholders. Before the two-year transition to private ownership was completed, President Richard Nixon won the 1968 presidential election.
A Republican administration might be expected to welcome the demise of even a small piece of the federal bureaucracy. But the Nixon administration proved reluctant to let go: Mr. Nixon’s aides saw one last chance to install a friend in the top job at Fannie, a provider of funding for home mortgages.
That would involve ousting Raymond Lapin, a Democrat appointed by President Johnson. Almost immediately after President Nixon took office in January 1969, Mr. Lapin clashed with the new Republican leaders at the Department of Housing and Urban Development, or HUD — headed by George Romney, father of the current Republican presidential nominee, Mitt Romney.
...
Rather than weaning the mortgage market from dependence on Fannie, President Nixon increased it by signing the Emergency Home Finance Act of 1970. This bipartisan legislation, aimed at ending a housing slump, created a second government-backed mortgage company Freddie Mac. It also allowed Fannie to buy “conventional” mortgages, or ones not insured by a government agency. Eventually, both Fannie and Freddie focused almost entirely on conventional mortgages, the type used by most Americans to buy homes. Fannie had burst out of its niche and was on its way to a dominant role in the mortgage market.
A Republican administration might be expected to welcome the demise of even a small piece of the federal bureaucracy. But the Nixon administration proved reluctant to let go: Mr. Nixon’s aides saw one last chance to install a friend in the top job at Fannie, a provider of funding for home mortgages.
That would involve ousting Raymond Lapin, a Democrat appointed by President Johnson. Almost immediately after President Nixon took office in January 1969, Mr. Lapin clashed with the new Republican leaders at the Department of Housing and Urban Development, or HUD — headed by George Romney, father of the current Republican presidential nominee, Mitt Romney.
...
Rather than weaning the mortgage market from dependence on Fannie, President Nixon increased it by signing the Emergency Home Finance Act of 1970. This bipartisan legislation, aimed at ending a housing slump, created a second government-backed mortgage company Freddie Mac. It also allowed Fannie to buy “conventional” mortgages, or ones not insured by a government agency. Eventually, both Fannie and Freddie focused almost entirely on conventional mortgages, the type used by most Americans to buy homes. Fannie had burst out of its niche and was on its way to a dominant role in the mortgage market.
Interesting...Mitt's father was involved (in some manner I'm sure) in growing Fannie Mae!
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