Fannie Mae alliances trip up politicians

By DARRYL LEVINGS and DAVE HELLING Once, Fannie Mae and Freddie Mac seemed a relatively quiet backwater of politics and finance. Now the world echoes with the collapse of banks that stumbled into the American subprime lending mess, and any political connection to Freddie and Fannie can be almost as toxic as their loan pools. Minutes into Tuesday’s debate, John McCain was calling the failure of the two federally chartered mortgage giants “the match that started this forest fire.” The Republican accused Barack Obama of taking a hike while McCain and other lawmakers pushed for reform in 2005. McCain’s ads, meanwhile, try to tar the Democrat with associations with Fannie’s ex-CEOs. Obama was ready. “Let’s, first of all, understand that the biggest problem in this whole process was the deregulation of the financial system,” he... [read full story]