Don't Blame Fannie Mae for Housing Crisis: Raines
Fannie Mae was not to blame for the U.S. housing crisis, former CEO Franklin Raines told CNBC Tuesday.
Both Fannie Mae and Freddie Mac, the nation’s leading lenders for home mortgages, needed massive government bailouts in 2008 right before the financial crisis hit.
But Raines said those problems surfaced “two years” after he left in 2004. “When I was at Fannie Mae, we had a tough risk management structure,” Raines said, adding his main goal was “not to put the company at risk and we didn’t.”
Raines, who was CEO from 1999 to 2004, also said Wall Street was more to blame for the erosion of credit standards than Fannie Mae or Freddie Mac .
Raines negotiated a settlement in 2008 with the Office of Federal Housing Enterprise Oversight, which oversees Fannie Mae, after the agency accused him of accounting irregularities while he was in charge. Raines paid a $2 million fine and give up stock options valued then at over $15 million, according to a consent order.
Correction: In an earlier version of this story, Raines's title at Fannie Mae and the agency he settled with were misidentified. Terms of the settlement also were incorrect.