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"So Mr. Mudd made a fateful choice. Disregarding warnings from his managers that lenders were making too many loans that would never be repaid, he steered Fannie into more treacherous corners of the mortgage market, according to executives.
"For a time, that decision proved profitable. In the end, it nearly destroyed the company and threatened to drag down the housing market and the economy."
and
"Between 2005 and 2008, Fannie purchased or guaranteed at least $270 billion in loans to risky borrowers — more than three times as much as in all its earlier years combined, according to company filings and industry data.
“'We didn’t really know what we were buying,' said Marc Gott, a former director in Fannie’s loan servicing department. 'This system was designed for plain vanilla loans, and we were trying to push chocolate sundaes through the gears.'”
