At the height of the financial crisis in 2008, Fannie Mae and Freddie Mac held $2 trillion in high-risk subprime loans, amounting to 42 percent of their single-family portfolios, according to Edward Pinto of the American Enterprise Institute.

Pinto, who served as chief credit officer for Fannie Mae until the late 1980s, arrived at this number by relying on data from the Securities and Exchange Commission (SEC),

which filed a lawsuit against six former GSE executives for securities fraud.

According to the SEC, the GSEs released several statements undervaluing the amount of subprime loans in their portfolios.

In a 2010 report, Pinto attributed the industry’s increase in subprime lending to government policies he said “forced a systematic industry-wide loosening of underwriting standards in an effort to promote affordable housing.”

“These policies were legislated by Congress, promoted by HUD and other regulators responsible for their enforcement, and broadly adopted by Fannie Mae and Freddie Mac (the GSEs) and the much of the rest mortgage finance industry by the early 2000s,” Pinto wrote.

Fannie Mae announced a $2 trillion commitment to affordable housing in 2003, according to Pinto.

HUD is reported to have been a proponent of subprime lending. Pinto quoted HUD as saying “The line between what today is considered a subprime loan versus a prime loan will likely deteriorate, making expansion by the GSEs look more like an increase in the prime market.”