By Rabble Rouser Reverend Amy on May 11, 2010 at 11:30 AM in Bailouts, Christopher Dodd, Congress (House & Senate), Current Affairs, Democrats, Economy, Fannie Mae, Freddie Mac, Governance, Housing & Housing Crisis, Mortgage Crisis, National Debt, Tim Geithner, treasury department, U.S. Treasury
And Fannie Mae are not included in the big Financial Reform Bill? I am just curious since they helped create this economic situation in which we find ourselves, and have drained billions of dollars from the coffers over the past couple of years. Now they want MORE.
Oh, yeah – Freddie Mac is asking for TEN Billion Dollars. I reckon they just want to add it to their tab:
ABC News’ Matthew Jaffe reports:
Government-backed mortgage giant Freddie Mac today asked for $10.6 billion in additional federal aid after reporting a loss of $8 billion in the first three months of this year.
To date Freddie Mac has been provided with around $51 billion in government funds. The new aid would bring the total assistance to the lender to over $61 billion.
Late last year the Treasury Department essentially agreed to provide a blank check to Freddie Mac and fellow government-backed lender Fannie Mae when the agency controversially removed the cap on federal support for the lenders.
A “blank check”? That is what Geithner wants to give Freddie and Fannie? I reckon that’s what happens when you have someone in charge who can’t even fill out his own tax forms properly (or, as I like to say, a Tax cheat). Some folks aren’t happy about it, though:
Republicans have blasted the administration for that move, as well as for not putting forth a plan to overhaul the government-sponsored enterprises. Thus far the administration’s only action has been the April 14 release of a series of questions for public comment on what to do with the mortgage giants.
In addition, Treasury Secretary Tim Geithner has acknowledged that the government expects to suffer “very substantial losses” on its investments in the lenders, with recent estimates ranging around a minimum of $85 billion.
Well, that’s just jake – “a minimum of $85 billion.” That’s our money, folks.
And let’s not leave Fannie Mae out of this mix. Oh, no – now Fannie is asking for some more cash, too, a cool for $8.4 Billion more?:
Fannie Mae requested another $8.4 billion from the federal government on Monday, saying that it expects its deficits to continue due to trends in the housing and financial markets.
The government-controlled mortgage giant said it lost $13.1 billion applicable to common shareholders in the first quarter of 2010. In the year-earlier quarter, Fannie suffered a $23.2 billion loss, but an accounting change makes comparing the year-over-year losses difficult.
Fannie’s request for more federal funds comes just four days after Fannie’s twin Freddie Mac also asked for a handout – to the tune of $10.6 billion – after posting an $8 billion quarterly loss.
In using Fannie (FNM, Fortune 500) and Freddie (FRE, Fortune 500) to prop up the mortgage market, the government in December lifted a $200 billion limit on their bailouts, essentially giving the twin housing lenders a blank check. Fannie Mae has already received $76.2 billion from the federal government and Freddie has gotten $50.7 billion.
“In the first quarter, we continued to serve as a leading source of liquidity to the mortgage market, and we made solid progress in our ongoing efforts to keep people in their homes,” Fannie Mae President and CEO Mike Williams, said in a press release.
Just to recap, Fannie Mae and Freddie Mac were largely responsible for bringing down the housing market (click HERE to read the rest of the article).
Yes, indeedy, so no doubt the new Finance Reform Bill begins with Fannie and Freddie, right? Oh, so wrong. Chris Dodd, who benefited mightily from Fannie Mae and Countrywide says, “Nooooooooo.” Dodd thinks it should wait:
Sen. Chris Dodd (D-Conn.) said Friday that legislation to address troubled mortgage lenders Fannie Mae and Freddie Mac will have to come after the current financial-reform effort.
Fannie and Freddie, which are known as “government-sponsored enterprises” (GSEs), have been a lightning rod for criticism of Democrats during the financial reform debate.
Dodd, who is chairman of the Banking Committee and has led the effort to craft a financial regulatory reform bill, said that there was not enough room in the legislation for rules covering Fannie and Freddie.
“Fannie and Freddie and the whole GSE system and it’s a great question and a legitimate one in desperate need of reform,” he said on CNBC. “But candidly there’s only so much I could only take on with this bill, and so that comes up. But not in this round. It’s in the next wave here we have to deal with GSEs.”
Well, sure, that makes sense, right? If you live in Upside-Down World, anyway (click HERE to read the rest). What a glaring, blatant, prop-up for those two entities that have done SO much to destroy the housing market. Unbelievable.
Frankly, I think this is a dereliction of duty on behalf of our Congress people. They refuse to hold accountable the very companies who wreaked havoc with our economy. They are in collusion with them. Even worse, they continue to throw money down the money hole.
I have used this video before, but it seems mighty timely given the requests of Fannie and Freddie (Onion video alert):
If only this were a joke…