The Fateful History of Fannie Mae
BY JAMES R. HAGERTY
The History Press, 2012
James R. "Bob" Hagerty is a writer and journalist well known to mortgage banking executives. For a decade, he covered most housing- and mortgage finance-related topics for The Wall Street Journal. During his tenure, he broke or covered many of the newsworthy developments from the 1990s forward. These included articles about mortgage lenders and brokers, Realtors[R], home builders, house prices, Wall Street, new forms of securitization and, last but arguably most important, all the major developments at Fannie Mae and Freddie Mac.
Absent this personal experience covering these issues for so long and so thoroughly, it is doubtful that Hagerty would have had the background, education and contacts necessary to write this brilliant little book (213 pages). Arguably, all mortgage executives should read the volume to better understand what happened to Fannie Mae, why it happened and, most important, how a similar fate can be avoided prospectively.
In the whole, The Fateful History of Fannie Mae is a chronicle of the mortgage finance agency from its inauspicious birth in 1938 as part of the New Deal to its ignominious collapse in September 2008.
The book is brilliant because it was written by an insider who really knows how to do historical research and can tell the saga in an interesting, intellectually stimulating and objective voice. Hagerty tells the story with relish in vivid, detailed language that buoys the reader.
What helps make the book so interesting is that much of this history is recent, and thus many in our industry are familiar with the names and events. It could be said that much of the book is a stroll down memory lane as individuals such as Ray Lapin, Roger Birk, Les Condon and Peter Treadway, several among dozens, come rolling forth.
The book has 11 chapters, with all but the first and last two largely sequential history running through the administrations of Truman, Eisenhower, LBJ, Nixon, Reagan, Bush the elder, Clinton and Bush II.
Chapter 1, His Name was Mudd," begins with the collapse of the government-sponsored enterprise (GSE) into conservatorship and the firing of Chief Executive Officer (CEO) Daniel Mudd in 2008. The story then reverts back to the agency's (humble) origins, and Hagerty takes the reader on a fascinating ride that weaves, twists and turns through 70 years of U.S. history.
Let's begin with a look at the book's structure, then move...