President Trump's Move to privatize Fannie Mae and Freddie Mac falters

Bravo President Trump! Another one of his achievements, even though he did not ultimately succeed in his first term! Both federal banks have a long history of failure and disaster! The federal government has no business to be involved like that in the financial/mortgage markets!

"The Treasury Department has decided not to restructure the taxpayers’ stake in the two mortgage giants, effectively ending the Trump administration’s push to ensure that they are eventually returned to private hands. ...
Instead, Mr. Biden would focus on ways to use the companies to boost housing affordability and promote homeownership, the advisers said. ..."

Fannie, Freddie Taxpayer Stake Won’t Be Restructured Under Trump - WSJ

Big Government Sponsored Entities Were Perpetrators In The Housing Market Crash

I recommend following article by Edward J. Pinto titled “Crime scene investigation: The premeditated assault on the prime mortgage” published on 8/15/2012 on the AEA website.

It’s a good, brief summary of how the Clinton Administration, Congress, and specifically the big government sponsored entities Fannie Mae and Freddie Mac have contributed to an enormous deterioration in lending standards in pursuit of affordable housing at any price.

“First, with respect to capital, Fannie went from having no home purchase loans with a down payment of three percent or less in 1992, to nearly 40% in 2007.

Second, Fannie loans with subprime credit - as evidenced by a FICO credit score of less than 660 - tripled from about 6% in 1990 to 18% in 2007.

Third, by 2007, over 1/3rd of Fannie and Freddie's fully documented loans exceeded a 45% total debt-to-income (TDI) ratio. This level was well in excess of their prior maximum level of about 42% in 1991, which had been associated with "B" grade or worse subprime loans.

Fourth, Fannie and Freddie, as the de facto standard setters for collateral valuation, effectively eliminated the use of investment and replacement cost approaches to value, and weakened the comparable sales approach.

Finally, Fannie and Freddie's confidence in borrower income statements evaporated as the percentage of acquisitions denominated as Alt-A, low document, or no document went from near zero in 1991 to nearly 40% in 2007.” (emphasis added)

Who allowed this to happen? Why did the President, US Congress, and federal regulators including the Fed fail to prevent this insane deterioration of lending standards?