Banks could not access risk info

Reader Input
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Perhaps the ones who criticize my statements as wild ravings (Reader Input, Dec. 14) should take the time to be better informed on the workings of the real financial world. Take the time to read the Wall Street Journal published Dec. 21 concerning the lawsuits being brought against the former executives of Fannie Mae and Freddie Mac by the Securities and Exchange Commission. These executives hid the numbers of low-quality and sub-prime loans that they had purchased from the analysts, risk managers, rating agencies and even the federal regulators. Thus, the information of the danger of high risks for the banks was not available to the banks. The article further shows the effect of the quota system on mortgage purchases, allowing people with very low (well below poverty level) to get a loan with little or no down payment. The Housing and Urban Development Department under the 1992 law encouraged this activity. This doesn’t excuse people from borrowing beyond their ability to pay, but does show how a bad government law and a few dishonest executives can cause a world of hurt to a nation. Cornelius Ough, Auburn