During 2004-2007, Fannie Mae and Freddie Mac stockpiled mortgages, many from the widespread practice of “liars loans” (i.e., no-documentation or low-documentation applications that skipped over validating income that could support the mortgage being sought). Liars loans were consistent with Congress’ exhortations that the mortgage lenders bend over backwards to help low-income families attain home ownership. […]
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