Fannie and Freddie always played safe

Re “Fannie and Freddie, old and new,” Opinion, Aug. 24

In his conclusion to an otherwise informative article, Christopher Thornberg resorts to advocating a very untenable position. He strangely claims that Fannie Mae and Freddie Mac have become the opposite of what they were because they are now part of the safe market. Fannie and Freddie have always been part of the safe market. They provided liquidity, but not for speculative or risky mortgage seekers, only for the creditworthy ones. The people who are suffering the worst losses in the current sub-prime crisis borrowed beyond their means, often induced by lenders’ deceptive loan terms.

Rather than asking Fannie and Freddie to partake in this speculative market of poor-risk borrowers, other lenders should be subjected to a new set of regulations that conform to the current practices of these two institutions, with the exception of loan size.

Ajay Kulshreshtha

Simi Valley