In his prepared remarks during Wednesday's House hearing on government-sponsored enterprises, Capital Markets and GSEs subcommittee Chairman Scott Garrett (R-N.J.) blamed the housing market meltdown on "bad mortgages."
Garrett further defined bad mortgages to mean subprime mortgages to risky, low-income borrowers that were purchased by Fannie Mae and Freddie Mac.
Dodd-Frank regulations don't address the cause of bad mortgages, Garrett said. Rather, bad mortgages were the product of federal housing policy that intended to increase homeownership among low-income borrowers, coupled with "loose money from the Federal Reserve."
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