"In 1994, Bill Clinton proposed increasing homeownership through a 'partnership' between government and the private sector, principally orchestrated by Fannie Mae, a 'government-sponsored enterprise' (GSE). It became a perfect specimen of what such “partnerships” (e.g., General Motors) usually involve: Profits are private, losses are socialized.

There was a torrent of compassion-speak: 'Special care should be taken to ensure that standards are appropriate to the economic culture of urban, lower-income, and nontraditional consumers.' 'Lack of credit history should not be seen as a negative factor.' Government having decided to dictate behavior that markets discouraged, the traditional relationship between borrowers and lenders was revised. Lenders promoted reckless borrowing, knowing they could off­load risk to purchasers of bundled loans, and especially to Fannie Mae. In 1994, subprime lending was $40 billion. In 1995, almost one in five mortgages was subprime. Four years later such lending totaled $160 billion."