Tag Archives: Fannie Mae

Obama wants banks to make home loans to people with poor credit

my work here is done

If you need more evidence of Obama being a psychopath, here it is.

Recall the Great Recession that began in 2008 was in large part due to the bursting of the housing bubble. That bubble, in turn, was caused by risky mortgage lending to too many people whose financial profiles make them poor candidates for loans.

Today, five years after the collapse of the housing market and contrary to the insistence that the market is “recovering,” the U.S. landscape is still littered with 301,874 “zombie” properties in which homeowners in foreclosure have moved out, leaving vacant  property susceptible to vandalism and degradation. The number of U.S. homes in foreclosure or bank-owned actually increased by 9% to 1.5 million properties nationally in the first quarter of 2013 compared to a year ago, while another 10.9 million homeowners nationwide are “under water” because they owe more than their property is worth. (See DCG’s post of March 28, “Obama’s New America….“)

houses-underwaterNearly 11 million U.S. homes are still under water

And yet the POS is pushing to make more home loans available to people with weak credit, which was exactly what had created the housing bubble and its subsequent bursting!

What if those people default on their mortgages?

Why, the 49% of hard-working Americans suckers who still pay income taxes will make up the difference! That’s wealth redistribution socialism, bro!

Zachary A. Goldfarb reports for The Washington Post, April 2, 2013, that Obama pledged in his State of the Union address to do more to make sure more Americans can enjoy the benefits of the housing recovery. His  economic advisers say the housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

In response, the Obama administration wants banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administrationthat insure home loans against default.Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.Deciding which borrowers get loans might seem like something that should be left up to the private market. But since the financial crisis in 2008, the government has shaped most of the housing market, insuring between 80% and 90% of all new loans, according to the industry publication Inside Mortgage Finance. It has done so primarily through the Federal Housing Administration, which is part of the executive branch, and taxpayer-backed mortgage giants Fannie Mae and Freddie Mac, run by an independent regulator.The FHA historically has been dedicated to making homeownership affordable for people of moderate means. Under FHA terms, a borrower can get a home loan with a credit score as low as 500 or a down payment as small as 3.5%. If borrowers with FHA loans default on their payments, taxpayers are on the line — a guarantee that should provide confidence to banks to lend.

But banks are largely rejecting the lower end of the scale, and the average credit score on FHA loans has stood at about 700. After years of intensifying investigations into wrongdoing in mortgage lending, banks are concerned that they will be held responsible if borrowers cannot pay. Under some circumstances, the FHA can retract its insurance or take other legal action to penalize banks when loans default.

“The financial risk of just one mistake has just become so high that lenders are playing it very, very safe, and many qualified borrowers are paying the price,” said David Stevens, Obama’s former FHA commissioner and now the chief executive of the Mortgage Bankers Association.

But critics say encouraging banks to lend as broadly as the administration hopes will sow the seeds of another housing disaster and endanger taxpayer dollars. “If that were to come to pass, that would open the floodgates to highly excessive risk and would send us right back on the same path we were just trying to recover from,” said Ed Pinto, a resident fellow at the American Enterprise Institute and former top executive at mortgage giant Fannie Mae.

But Administration officials say they are looking only to allay unnecessary hesi­ta­tion among banks and encourage safe lending to borrowers who have the financial wherewithal to pay. An unnamed senior administration official who was not authorized to speak on the record said, “There’s always a tension that you have to take seriously between providing clarity and rules of the road and not giving any opportunity to restart the kind of irresponsible lending that we saw in the mid-2000s.”

Blah, blah, blah.

H/t FOTM’s Christy.

~Eowyn

Wal-Mart vs. The Morons

Wal-Mart vs. The Morons

1. Americans spend $36,000,000 at WalMart Every
hour of every day.

2. This works out to $20,928 profit every
minute!

3. Wal-Mart will sell more from January 1 to St.Patrick’s Day
(March 17th) than Target sells all year.

4. Wal-Mart is bigger than Home
Depot + Kroger + Target +Sears + Costco + K-Mart combined.

5. Wal-Mart
employs 1.6 million people, is the world’s largest private employer, and most
speak English.

6. Wal-Mart is the largest company in the history of the
world.

7. Wal-Mart now sells more food than Kroger and Safeway combined, and keep in
mind they did this in only fifteen years.

8. During this same period, 31
big supermarket chains sought bankruptcy.

9. Wal-Mart now sells more food
than any other store in the world.

10. Wal-Mart has approx 3,900 stores
in the USA of which 1,906 are Super Centers; this is 1,000 more than it had five
years ago.

11. This year 7.2 billion different purchasing experiences
will occur at Wal-Mart stores. (Earth’s population is approximately 6.5
Billion.)

12. 90% of all Americans live within fifteen miles of a
Wal-Mart.

You may think that I am complaining, but I am really laying the
ground work for suggesting that MAYBE we should hire the guys who run Wal-Mart
to fix the economy.

This should be read and understood by all Americans
Democrats, Republicans, EVERYONE!!

To President Obama and all 535 voting members of the Legislature
It is
now official that the majority of you are corrupt morons:

a.. The U.S.
Postal Service was established in 1775. You have had 234 years to get it right
and it is broke.

b.. Social Security was established in 1935. You have
had 74 years to get it right and it is broke.

c.. Fannie Mae was
established in 1938. You have had 71 years to get it right and it is
broke.

d.. War on Poverty started in 1964. You have had 45 years to get
it right; $1 trillion of our money is confiscated each year and transferred to
“the poor” and they only want more.

e.. Medicare and Medicaid were
established in 1965. You have had 44 years to get it right and they are
broke.

f.. Freddie Mac was established in 1970. You have had 39 years to
get it right and it is broke.

g.. The Department of Energy was created in
1977 to lessen our dependence on foreign oil. It has ballooned to
16,000
employees with a budget of $24 billion a year and we import more oil
than everbefore. You had 32 years to get it right
and it is an abysmal
failure.

You have FAILED in every “government service” you have shoved
down our throats while overspending our tax dollars.

AND YOU WANT AMERICANS TO BELIEVE YOU CAN BE TRUSTED WITH A GOVERNMENT-RUN HEALTH CARE SYSTEM??
I know what’s wrong. We have lost our minds to “Political Correctness” !!!!!!!!!!!!!!!!!!
Someone please tell me what’swrong with all the people that run this country!!!!!! We’re “broke” & can’t help our own Seniors, Veterans, Orphans, Homeless etc.,??????? In the last months we have provided aid to Haiti , Chile , and Turkey …And now Pakistan ……..previous home of bin Laden. Literally, BILLIONS of DOLLARS to say nothing about the handouts to ILLEGAL IMMIGRANTS!!!
Our retired seniors living on a ‘fixed income receive no aid nor do they get any breaks
AMERICA: a country where we have homeless without shelter, children going to bed hungry, elderly going without ‘needed’ meds, and mentally ill without treatment -etc,etc.
Imagine if the *GOVERNMENT* gave ‘US’ the same support they give to other countries. Sad isn’t it?
What happened to the old rule, “Charity begins at home”? Another value we have discarded thanks to our elected officials… both parties!

99% of people won’t have the guts to forward this.
I’m one of the 1% — I Just Did

“United Saves America”
H/T  Igor
 ~Steve~

 

 

State attorney generals sue powerful fed agency blocking bank lending

I just heard a snippet of a very interesting interview on Mike Huckabee’s radio talk show this morning.

Guv. Huckabee was speaking to South Carolina Attorney General (AG) Alan Wilson about a lawsuit Wilson and other state AGs just filed against the federal government over the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law by Obama in July 2010.

Wilson maintains that one big reason why the U.S. economy is stalled and unemployment remains high is because banks won’t lend money to businesses, although they’re sitting on a lot of cash. Wilson attributes this to the Consumer Financial Protection Bureau (CFPB) — a creation of the Dodd-Frank Act and a powerful federal govt agency that has no Congressional oversight and restricted judicial review, but answers only to the even more powerful Federal Reserve System, itself a bastard hybrid of part-govt part-private banks which is also not subject to Congressional oversight.

The very powerful director of the CFPB is Richard Cordray, an Obama appointee. The even more powerful director of the Federal Reserve is Ben Bernanke.

The authors of the Dodd-Frank Act are both unaccountable: Sen. Chris Dodd had already retired from the Senate in 2011, and Congressman Barney Frank is not seeking reelection. Both also had a direct hand in the housing collapse that began America’s Great Recession in that, in their respective roles as chair of the Senate Banking Committee and chair of the House Financial Services Committee, the two men had ignored the imprudent reckless lending policies of the government-sponsored mortgage lenders Fannie Mae and Freddie Mac.

~Eowyn

A rogues gallery (l to r): Chris Dodd, Barney Frank, POS, Richard Cordray, Ben Bernanke

Here is an article, “Republican State AGs Resisting Cooperation with CFPB,”  by Carter Dougherty for BusinessWeek on the lawsuit:

A group of Republican state attorneys general has declined to sign cooperation agreements with the Consumer Financial Protection Bureau, part of an escalating Republican revolt against the agency that began in the U.S. Congress.

Richard Cordray, the agency’s director, asked all 50 states in March to sign a memorandum of understanding designed to protect confidential information shared among states and the bureau. To date, only 12 states — all but one with Democratic attorneys general — have signed, according to the bureau and documents obtained in a public records request.

Oklahoma Attorney General Scott Pruitt said in an interview that he is declining to sign the agreement because of legal objections to the law that created the consumer bureau, the 2010 Dodd-Frank Act. “There are misgivings I have about the authority and scope and power of the CFPB and the power granted to the director,” Pruitt said in an interview. “Frankly, until some of those issues are fleshed out, it is very premature for a state to enter into an MOU.”

Four attorneys general, led by Pruitt, plan to join an existing lawsuit that challenges the constitutionality of Dodd-Frank and the CFPB, according to a person briefed on the decision. Pruitt and attorneys general from South Carolina, Michigan and Kansas may become plaintiffs in the suit as soon as tomorrow, said the person, who spoke on condition of anonymity because the decision wasn’t public.

Separation of Powers

The lawsuit in federal court in Washington was filed June 21 by State National Bank of Big Spring, Texas. The bank argues that the structure of the consumer bureau violates the constitutional principle of separation of powers because Congress does not appropriate its budget, the president has limited ability to remove its director and courts face restrictions in reviewing its actions.

South Carolina Attorney General Alan Wilson, told a campaign rally last week in Greenville, South Carolina, of plans for legal action.

“We’re going to challenge that law,” Wilson said on Sept. 14, in remarks reported by Fox News. “We’re going take the battle back to Washington, D.C., because community banks on Main Street shouldn’t be choked to death so that big banks on Wall Street can take our money.”

The CFPB was created by Dodd-Frank to consolidate federal financial consumer protection authority in a single agency. Since starting work in July 2011, it has set up a complaint system for consumer services, proposed regulations on housing finance and is studying areas including mandatory arbitration, payday lending and overdraft protection.

State Cooperation

Cooperation with state attorneys general has been a signature effort of the consumer bureau since Harvard professor Elizabeth Warren began setting it up in late 2010. Warren, who is now running for the Senate as a Democrat from Massachusetts, touted state law enforcers as “natural partners” for the agency because of their focus on consumer protection.

Republicans opposed creation of the bureau, and Senate Republicans refused to confirm anyone to the position of CFPB director. That standoff led President Barack Obama to install Cordray as director on Jan. 4 using a process known as a recess appointment.

Republican opposition to CFPB and Cordray hasn’t been absolute.

Republican state attorneys general including Rob McKenna of Washington, John Suthers of Colorado and Mark Shurtleff of Utah signed an Oct. 18, 2011 letter supporting Cordray as CFPB director. Cordray, in response to a personal request from Suthers, publicly promised to help AGs combat payday lenders who dodge state laws by affiliating with Native American tribes.

Constitutionality Challenged

Pruitt of Oklahoma has spearheaded the work among attorneys general on challenging the constitutionality of Dodd-Frank, according to the person briefed on the lawsuit. Diane Clay, a spokeswoman for Pruitt, declined to comment on the lawsuit.

“General Pruitt has been leading the discussion on legal challenges to the unconstitutional provisions in Dodd-Frank for more than a year, and will work with South Carolina to lead the state litigation once plans are announced,” she said.

Michigan attorney general Bill Schuette and his counterpart in Kansas, Derek Schmidt, will also join the lawsuit, the person said. Schuette’s spokeswoman Joy Yearout declined to comment. Schmidt spokesman Jeff Wagaman did not return an e-mail or phone call seeking comment.

‘Disdain’ for States

Pruitt, Wilson and Schuette all signed a March 5 memo from the Republican State Leadership Committee, an association of Republican state officials, that criticizes the Obama administration’s “disdain for states, federal laws it finds inconvenient, the Constitution and the courts.” The memo includes Cordray’s recess appointment on a list of Obama’s objectionable actions.

Pruitt has opposed other initiatives backed by the Obama administration. In February, he declined to join a 49-state settlement with five large mortgage servicers over foreclosure practices, preferring to cut his own deal instead.

The CFPB and the National Association of Attorneys General signed a “joint statement of principles” in April 2011. In a March 6 speech, Cordray, a former Ohio attorney general, asked states to also sign individual MOUs, and asked for a “quick turnaround.”

“We want to expand on what you already do so well — and we want you to take advantage of new resources we bring to the arena,” Cordray said in an address to NAAG in Washington.

Agreements Tallied

More than five months later, only 10 states had signed the memorandum: New Hampshire, New Mexico, Montana, New York, Vermont, North Carolina, Hawaii, Iowa, Mississippi and Nevada, according to copies obtained on Aug. 22 under a Freedom of Information Act request.

Since then, the District of Columbia, Wyoming and North Dakota have signed such memorandums with the consumer bureau, agency spokeswoman Moira Vahey said in an e-mail.

“We are pleased that we have a dozen agreements and additional agreements in the works. However, this is a state-by- state process and will take time,” Vahey said.

The purpose of the memorandum is to “preserve the confidentiality of information the parties share,” according to the documents. It states that any non-public “written or oral information exchanged between the parties will be deemed confidential.”

North Dakota attorney general Wayne Stenehjem is the only Republican among state officials who have signed the memorandum. Those who have declined gave differing reasons.

Greg Zoeller, the Republican attorney general of Indiana, said the pact was “unnecessary” because his office can sign confidentiality agreements that cover specific enforcement cases they work on with CFPB.

“I never quite understood why they wanted a common memorandum of understanding,” Zoeller said in an interview. “It has not really caught on well.”

At the same time, Zoeller downplayed the need for broader challenges to the CFPB. He called potential lawsuits evidence that the country is in a “silly season” before the election, and said that a Republican-only lawsuit “hurts our credibility in challenging federal laws.”

For instance, no Democratic attorneys general joined lawsuits against the Obama health care law, Zoeller said. The Supreme Court eventually ruled against them.

Other Republicans involved with state issues took a harder line on the Obama administration and Cordray’s work.

“This effort for bipartisan cooperation with the states has clearly failed at this point,” Chris Jankowski, president of the Republican State Leadership Committee, said in an interview.

The bank’s case is State National Bank of Big Spring v. Geithner, 1:12-cv-01032, U.S. District Court, District of Columbia (Washington).

Ode to Barney Frank

November 28, 2011, was a sad day for America.

After 16 terms and 30 years in the U.S. House of Representatives, Massachusetts Democrat Congressman Barney Frank announced he’s retiring and won’t be seeking reelection next year.

As the ranking minority member and then Chairman (2007-2011) of the powerful House Financial Services Committee, Frank not only was lax in overseeing the liberal lending policies of Fannie Mae and Freddie Mac – policies that led to the bursting of the housing bubble and the subprime mortgage crisis that began in 2007. Frank actively encouraged Fannie and Freddie’s loose lending policy, insisting in 2003 that: “These two entities …are not facing any kind of financial crisis … The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

As a modest token of our gratitude for his service to America, We the Taxpayers sing this song of praise to Barney Frank:

H/t our beloved Miss May.

~Eowyn

The real thieves…

Occupy DC!

Fannie & Freddie Bonuses Three Times the Size of AIG Bonuses

The Daily Caller:  Remember the outrage from the administration over hefty bonuses paid to AIG executives in 2009? Back then, shortly after AIG was bailed out by American taxpayers, the company went through with already planned bonuses to top executives.

The bonuses, which totaled $165 million, sparked a hot national debate over how much freedom private companies should have to pay large bonuses after they had become dependent on taxpayers. The House and Senate passed measures calling for the taxing of executive bonuses for bailed-out companies to the tune of 70-90 percent.

The president reacted forcefully: “”[I]t’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?”

Last week, another set of bonuses for bailed-out companies got decidedly less bad press. Fannie Mae and Freddie Mac, to whom taxpayers have already given hundreds of billions, doled out $12.79 million in bonuses to its executives for meeting modest goals.

The average executive bonus is far larger for these government entities.  Fannie and Freddie spent $12.79 million on 10 bonuses for an average of $1.27 million per bonus. AIG spent $165 million on 400 bonuses for an average of $412,000 per bonus.  That’s about three times the level of bonus for bailed-out Freddie and Fannie execs compared to AIG.

Some have argued that the AIG bonuses were different because they went to people who caused the problem, which is true, but only partly. A lot of them were going to people outside the parts of AIG that caused the trouble, but the criticism of AIG remains valid.

At Fannie and Freddie, the bonuses are going to those who are attempting to mitigate taxpayer losses, and the argument is that Fannie and Freddie have to compete with private sector salaries in order to get the best to do the mitigating.

Nonetheless, lawmakers are moving toward limiting bonuses for these executives. Even if true, it is a galling argument that we must shell out more money to Fannie and Freddie simply because they’ve already lost so much of our money that we need to give them lots of our money to prevent the loss of more of our money.

One man who has been instrumental in allowing these failing programs is Bawney Frank, who was chairman of the House Financial Services Committee from 2007–2011.  In 2003, Frank opposed a Bush administration for transferring oversight of Fannie Mae and Freddie from Congress and the Department of Housing and Urban Development to a new agency that would be created within the Treasury Department.  Frank stated, “These two entities …are not facing any kind of financial crisis … The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”  He also stated what has been called his “famous dice roll”: “I do not want the same kind of focus on safety and soundness [in the regulation of Fannie Mae and Freddie Mac] that we have in the Office of the Comptroller of the Currency and the Office of Thrift Supervision. I want to roll the dice a little bit more in this situation towards subsidised housing.”

Not facing any kind of financial crisis?  Then why are they asking for $7.8 billion from the Treasury Department?

Those Occupy Wall Street folks should be camping out in front of the White House. These executives receiving million dollar bonuses while they continue to steal out taxpayer dollars is the real crime.

DCG

Barney Frank Supports the Commie “Protesters” While Seeking Wall Street Cash

The New Three Stooges

Yes, you read that right, and no, you have not accidentally swerved into the Onion.

Bawney Fwank, who I have posted about previously concerning his culpability when it comes to the financial and economic meltdown that this entire planet is now facing, actually supports those who, if they were even remotely bright enough, would be trampling the petunias into mush on his own front lawn.

Via politico.com:

Rep. Barney Frank might sympathize with the Occupy Wall Street protesters, but he’s still got friends in the financial world.

The Massachusetts Democrat is heading to New York hoping to raise tens of thousands of dollars Thursday at a fundraiser at the home of Charles Myers, a senior investment banking advisor at Evercore Partners. Myers is one of several Wall Street execs listed on the invite soliciting up to $2,500 from attendees for Frank’s reelection committee, according to a copy obtained by POLITICO.

Frank, the co-author of the sweeping financial regulatory reform bill signed into law last year, said in a recent interview with POLITICO that he didn’t see any conflict between supporting the protests and taking financial services money.

“If you take money from them, but you don’t vote [for] the things they want, how does that put you in conflict?” Frank questioned.

Frank said he supports the movement “to the extent that they obey the law” and that he wishes “that kind of energy was around two years ago when we were voting on the financial reform bill. We’d have a tougher bill.”

Frank spokesman Harry Gural said the event isn’t exclusively a Wall Street fundraiser, and will include members of the gay and lesbian community and others.

You will find the rest of the article at this link.

Justice is going to find this cretin one day – if not in this life, then most certainly the next.

When that day comes, I am going to be soooooooo glad that my name is not Barney Frank.

-Dave

Top Ten Reasons That Liberals are Detestable Human Beings

By Tom in NC

10. Liberals claim that they want better education for our children, but they pour taxpayer money into a failed public education system that is funneled right in to education union coffers that are paying bloated salaries of union bosses and then turned around and donated to democrat candidates without the least hint of accountability at all.

9. Liberals claim that Consevatives are in bed with and give tax breaks to the rich corporations but they continue to bail out corrupt Fannie Mae and Freddy Mac and allowed big democrat contributor GE who made 5.1 billion in U.S. profits in 2010 to scoot away with a tax bill of ZERO, in fact they claimed a tax benefit of 3.2 billion.

8. Liberals will not allow us to drill for oil off of our own coasts but don’t lift a finger to stop other countries from drilling there and even invite them to do so.

7. Liberals claim that Conservatives are racists, however it is liberals that often hurl racial slurs at Conservative Blacks, Latinos and Asians etc.

6. Liberals claim that Conservatives are violent and hate-filled, while liberal supporting union goons verbally and physically assault Conservatives at every opportunity.

5. Liberals claim Conservatives do not care about children but yet liberals provide over 3,300 abortions EVERY day.

4. Liberals claim that they want better healthcare for Americans but have imposed a socialist healthcare system patterned after the European style which results in rationing, life saving cancer drugs being denied to patients and surgeries being postponed for weeks, months and even years.

3. Liberals claim that the Conservatives support of capitalism results in greed and suppression of the lower and middle class Americans, when the exact opposite is true. Capitalism promotes economic growth and allows lower and middle class Americans to prosper because with it comes banks that will loan money to start small businesses and to expand businesses which results in lower unemployment and a decrease in poverty.

2. Liberals claim to support the military, but their actions speak otherwise by deep cuts in their funding, ridiculous restrictions in the rules of engagement, getting us involved in another war in Libya without congressional approval and outright lies about  so-called crimes committed by military members.

And the Number One Reason That Liberals are Detestable Human Beings

1. Liberals would have you believe that they care about this country, which is a mountain of B.S., their $14 Trillion debt means that your baby lying in their crib is already over $40,000 in the hole long before they even enter the workforce. It means that China and Japan along with the Fed hold the largest chunk of our debt through Treasury securities and makes us beholden to them and not only weakens us economically but could leave us open to blackmail on a foreign policy or national security level.

Request to Flush More Moolah

Freddie Mac posts $1.7B loss for Q4
Feb 24 07:05 PM US/Eastern
By MARCY GORDON
AP Business Writer
WASHINGTON (AP) – Government-controlled mortgage buyer Freddie Mac managed a narrower loss of $1.7 billion for the October-December quarter of last year. But it has asked for an additional $500 million in federal aid—up from the $100 million it sought in the previous quarter.Freddie Mac also posted a $19.8 billion loss for all of 2010.

The government rescued Freddie Mac and sibling company Fannie Mae in September 2008 to cover their losses on soured mortgage loans. It estimates the bailouts will cost taxpayers as much as $259 billion.

Freddie Mac’s October-December loss attributable to common stockholders works out to 53 cents a share. It takes into account $1.6 billion in dividend payments to the government. It compares with a loss of $7.8 billion, or $2.39 a share, in the fourth quarter of 2009.

The company said the recovery of the housing market is still fragile.

“As we begin 2011, the housing recovering remains vulnerable to high levels of unemployment, delinquencies and foreclosures,” Chief Executive Charles Haldeman said in a statement. “We expect national home prices to decline this year as housing will continue to take some time to recover.”

Fannie Mae and Freddie Mac own or guarantee about half of all mortgages in the U.S., or nearly 31 million home loans worth more than $5 trillion. Along with other federal agencies, they played some part in almost 90 percent of new mortgages over the past year.

Fannie and Freddie buy home loans from banks and other lenders, package them into bonds with a guarantee against default and sell them to investors around the world.

The government’s estimated cost of bailing out the mortgage giants far exceeds the $132.3 billion they have received from taxpayers so far. That would make theirs the costliest bailout of the financial crisis.

The two have been hit by massive losses on risky mortgages purchased from 2005 through 2008. The companies have tightened their lending standards after those loans started to go bad. Default rates on new loans are far lower.

The Obama administration unveiled a plan earlier this month to slowly dissolve the two mortgage giants. The aim is to shrink the government’s role in the mortgage system. The proposal would remake decades of federal policy aimed at getting Americans to buy homes and probably would make home loans more expensive.

Exactly how far the government’s role in mortgages would be reduced was left to Congress to decide. But all three options the administration presented would create a housing finance system that relies far more on private money.

Treasury Secretary Timothy Geithner will face questions from lawmakers next week at a congressional hearing on the proposal.

Sure, why not flush some more taxpayer money. At this point our economy is in the crapper anyway.

Tom in NC

Steve’s Sunday Funny…NOT!!!

 

 

    

 
Fannie, Freddie bailout: $153 billion … and counting

 

 

Correct me if I’m wrong, but is this not the Same Freddie, Fannie where Franklin Raines walked away with about 93 Million after cooking the books? And is now a respected member of the Biz Community. Just saying..that’s all.
By Chris Isidore, senior writerFebruary 11, 2011: 1:48 PM ET

 

NEW YORK (CNNMoney) — When the dust settles, the federal bailout of Fannie Mae and Freddie Mac will be the most expensive government rescue of the financial crisis — it already stands at $153 billion and counting.

 

Even as the Obama administration unveiled its plan for reforming the firms, experts agree taxpayer losses are going to continue to climb, no matter what Congress eventually decides to do with them.

 

The Federal Housing Finance Agency, the government body that oversees the two mortgage giants, has estimated that losses through 2013 will require Treasury to pour another $68 billion to $210 billion into the firms on top of the money already used to prop-up the firms and the housing market.

“Regardless of what they do, even if they were to change their status tomorrow, none of that will change the losses that will be coming due on their existing book of business,” said Guy Cecala, publisher of Inside Mortgage Finance, an industry trade publication.

To read rest of the gory details.. Go HERE

~Steve~

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