“Along with federal agencies, taxpayer-owned behemoths Fannie Mae and Freddie Mac guarantee more than nine of every 10 new mortgages. They were effectively nationalized in 2008. Delinquencies on home loans they back have thus far cost taxpayers more than $150 billion. Their regulator, the Federal Housing Finance Agency, estimates Fannie and Freddie could need up to $363 billion in taxpayer cash through 2013, it said in an October report.
“We are going to start the process of reform now,” Geithner said in a statement. “But we are going to do it responsibly and carefully so that we support the recovery and the process of repair of the housing market.”
Treasury Secretary Geithner refers to repairing the damage from the exploding housing bubble, A bubble he helped to allow inflate as head of the New York Fed during the Bush years. At the very least, he stood by and watched. Now, he’s here to help “repair” the damage.
Obama seems like the last guy you’d want in place to kill off a a pair of toxic agencies like Fannie and Freddie. They “help people get into homes.” Oh that, along with helping themselves to big bonuses and while using your taxpayer money to inflate housing prices. While Obama might be the last guy you’d expect to fix this sorry state, the Bush era Republicans were no better at controlling the growth of the Freddie and Fannie beast. So, no points for so-called “conservatives” either. The beast lives on and on. Evidently.
Other countries have similar rates of home ownership with no government subsidized mortgages. What’s the matter with us?
The article below describes Obama’s plan as “slow death.” In real bureaucratic terms, slow death is no death.
The housing bubble effects are still being felt, and may not have entirely played out even yet. It wasn’t Freddie and Fannie that caused this valuation bubble, it was the implicit guarantee that the US Government would back them no matter what. Allowing them, and the too big to fail banks, to carelessly speculate. Obama’s “plan” to fix that problem is simply more of the same.
Slow death indeed.