cover image Days of Slaughter: Inside the Fall of Freddie Mac and Why It Could Happen Again

Days of Slaughter: Inside the Fall of Freddie Mac and Why It Could Happen Again

Susan Wharton Gates. John Hopkins Univ., $24.95 (304p) ISBN 978-1-4214-2193-3

As a former vice president of public policy at Freddie Mac, Gates is well positioned to explain the corporation’s contribution to the 2008 mortgage lending crisis that nearly collapsed the U.S. economy. Freddie Mac and its sister entity, Fannie Mae, are the two government-sponsored entities (GSEs) that purchase mortgages from banks. They were once publicly traded but have operated as wards of the federal government since 2008. Much of this story has been well reported already, but Gates adds her own, sometimes juicy recollections of events inside Freddie Mac, along with updates on where things currently stand in the mortgage industry. Her book shines when examining the “serious fault line” in Freddie Mac’s charter and the unresolvable conflict in the corporation’s dual mission to broaden home ownership and ensure mortgage market stability. Gates admits Freddie Mac failed to achieve either mission, through she places plenty of blame elsewhere as well. Her recommendations about what should be done to avert another mortgage meltdown come across as surprisingly naive and largely unworkable, depending on vague, unenforceable notions about corporate ethics. Nonetheless, this detailed, thoughtful examination of the GSEs before, during, and after the crisis is a welcome contribution to the historical record of a turbulent time. (Mar.)