That is the rub the goverment changed those conforming standards, but regardless the government has no business “buying” loans.
“That is the rub the goverment changed those conforming standards,
I’m not aware of any change to conforming loan standards. Subprimes could still be conforming loans if the borrower had a sufficiently large down payment, had proof of income, the usual.
During the bubble most subprimes lent by Wall Street firms were non-conforming, something that WS wanted because non-conforming loans bring much higher yields.
“but regardless the government has no business “buying” loans.””
I’m not sure what part of government you think bought loans. Fanny was created as a GSE in the 30s but spun off in the late 60s and was a NYSE listed company. Freddy was created as a GSE around 1970 and also became a NYSE listed firm.