The announcement of the SEC lawsuit was touted as vindication professional liars who promote a standard republican narrative about the history of the mortgage crisis. Since late 2008, Peter Wallison of the American Enterprise Institute has been touting the ridiculous notion that Fannie and Freddie caused the mortgage crisis because they held $1.6 trillion (later upsized to $1.8 trillion) in "subprime and otherwise risky" mortgages. This metric was repeated endlessly by right wing think tanks and academics, and in a New York Times bestseller, Reckless Endangerment. It has also been conclusively debunked by the FCIC and by the Center for American Progress.
As New York Times writer Joe Nocera noted in his column, "The Big Lie," which referred to Wallison's thesis, the SEC's lawsuit proved that Wallison's claim that Fannie and Freddie led the way in expanding the subprime market was, well, a lie. But promoters of The Big Lie remain impervious to facts.
A
Similar Case Against Fannie: According
to Judge Crotty's reasoning, another lawsuit against
Fannie and its executives should have been dismissed years ago by District
Court Judge Richard Leon. The complaint alleges
a litany on accounting infractions; but not every accounting infraction is
material. The complaint alleges that billions of dollars of mark-to-market
losses were concealed by Fannie and its management; except those mark-to market
losses were disclosed at the time as an adjustment to equity. Anyone
who read the entire financial statements and understood accounting rules could
figure out what was going on.
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