Because there was an enormous financial crisis.
From your link:
The GSE business model has outperformed any other real estate business throughout its existence. According to the
Annual Report to Congress, filed by the Federal Housing Finance Agency, over a span of 37 years, from 1971 through 2007, Fannie's average annual loss rate on its mortgage book was about four basis points. Losses were disproportionately worse during the crisis years, 2008 through 2011, when Fannie's average annual loss rate was 52 basis points. Freddie Mac's results are comparable.
By way of contrast, during the 1991–2007 period, commercial banks' average annual loss rate on single family mortgages
was about 15 basis points. During the 2008-2011 period, annual losses were 184 basis points.
Or take a look at the
FHFA study that compares, on an apples-to-apples basis, GSEs loan originations with those for private label securitizations. The study segments loans four ways, by
ARMs-versus-fixed-rate, as well as by vintage, by FICO score and by loan-to-value ratio. In almost every one of 1800 different comparisons covering years 2001 through 2008, GSE loan performance was exponentially better. On average, GSE fixed-rate loans performed four times better, and GSE
ARMsperformed five times better.
