Andrew Cuomo & our Fiscal Crisis

The Wall Street Journal editorial of Feb. 8th detailed indications of the key role played by Andrew Cuomo in bringing about our current fiscal crisis. Andrew Cuomo, NY’s Attorney General, was Secretary of Housing and Urban Development (HUD) during the late 1990’s. From the official HUD web site, we see that Secretary Cuomo established new ‘affordable housing goals’ requiring Fannie Mae and Freddie Mac to buy $2.4 Trillion in mortgages over the next 10 years. This historic action raised the required percentage of mortgage loans for low and moderate income families that the companies (Fannie & Freddie) must buy from 42% of their total purchases to a new high of 50% in the year 2001. Following this Cuomo directive, Fannie & Freddie’s purchases of subprime loans rose dramatically. Subprime and “liar” loans helped cause the two mortgage giants to fail, putting the taxpayers on the hook for well over $100 billion in losses, and possibly hundreds of billions more. A full analysis of Mr. Cuomo’s responsibility for our current crisis is warranted, as the mortgage meltdown is a major contributor to the greatest recession and fiscal crisis since the Great Depression.