Why is this suddenly a problem to many in the media? George Bush begged congress on many occasions to take control of Fannie and Freddie but, along party lines, the requests were rejected every time.
Who lead the charge to protect F&F? hmmmm Let's see, who was in charge of the department for all these years? Oh, sure, it was and is Chris Dodd and Barney Frank, both liberal Democrats. Any wonder why all Democrats voted to sustain the disaster?
Look no further than the housing disaster that we are in now due to the liberal Democrats purposeful actions forcing banks to make bad loans. And guess who got the most contributions for their reelections campaigns from F&F, Dodd, Frank and Obama. McCain was fourth, but way down on the money list.
And just as a reminder, the people that were running the show got 261 million in salary and bonuses over six years, using misinformation and out right fraud to acquire the money. Right! You guessed it, all Democrats. Who was president at the time. Clinton. Who was attorney general, Janet Reno, big time Democrat and prime mover in forcing the banks to make the bad loans under penalty of law.
Now with the new financial bill coming through the government with Dodd and Frank in charge, who knew Fannie and Freddie would be exempt from any regulation. Go figure!
FANNIE-FREDDIE BAILOUT COULD COST TAXPAYERS $1 TRILLION
Source: Michelle Lodge, "Fannie-Freddie Bailout Could Cost Taxpayers $1 Trillion" CNBC, June 29, 2010.
American taxpayers are now on the hook for some $145 billion in housing losses connected to Fannie Mae and Freddie Mac loans. Unfortunately, that amount could be just the tip of the iceberg, says CNBC.
According to the Congressional Budget Office: The losses could balloon to $400 billion. And if housing prices fall further, the cost to taxpayers could hit as much as $1 trillion.
Two things are clear, says CNBC: Taxpayers don't want to foot the bill. Fannie and Freddie, taken over by the government in 2008 to stanch the financial bloodletting, need a major overhaul.
At the crux of the financial crisis, the government took over Fannie and Freddie to avert possible massive losses for banks, money-market funds and, perhaps, most importantly, foreign institutions that purchased billions of Fannie and Freddie debt because of its implied government guarantee.
The Chinese, for example, had invested heavily, and the United States decided it didn't want them to take a loss on their investment.
One possible scenario for the entities is to turn them into utilities, says Sean Dobson, CEO and chair of Amherst Securities, whose company trades as much as $50 billion in mortgages annually. "Freddie and Fannie could be used to standardize the mortgage product," says Dobson, "to completely describe what the risks are and then act as a conduit for the capital markets to take the risk."
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