CHAPTER 8A Surprise from the Treasury Department

IN APRIL 1998, JIM JOHNSON ANNOUNCED THAT HE WOULD BE retiring as Fannie Mae’s chairman at the end of the year and that Frank Raines would succeed him.

A Rough Greeting for Raines

In a sense, Raines had been preparing for the Fannie Mae job his entire life. Growing up poor in Seattle as one of six children, he had early experience with the importance working-class families put on the goal of home ownership and the role played by capital in attaining it. His father, Delno, was a custodian for the city park service, and his mother, Ida, worked as a cleaning woman for Boeing (on whose board Raines later would serve). Raines’s parents could not qualify for a mortgage from a traditional lender—their ...

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