Thursday, March 1st, 2012 and is filed under Blog
There is no greater poster child for government intervention gone awry than the Federal Housing Administration. It is safe to say that Fannie Mae and Freddie Mac were the largest contributes to the housing crisis, and by extension, the broader recession. Adding insult to injury, these officious entities received a $112 billion bailout so they can continue to distort the housing market and exacerbate the factors that led to the original crash.
When Republicans came to Congress, we thought that the days of these two agencies were numbered. It was clear that there was a bi[artisan consensus to privatize them. Well, we were wrong. Not only have Republicans failed to bring a privatization bill to the floor of the House, they even agreed to expand the role of Freddie and Fannie in high-cost mortgages as part of last year’s HUD appropriations bill.
Now that we failed to crush these pernicious government market-distorters, they are coming to suck out more money from taxpayers. This from CQ:
Fannie Mae reported its fourth consecutive multibillion-dollar loss at the end of 2011, meaning the mortgage giant will call for $4.6 billion in new government aid to stay afloat.
For the fourth quarter of 2011, Fannie posted a $2.4 billion loss. A company statement accompanying its annual report, released Wednesday, said the ongoing losses stemmed from bad mortgages booked before the financial crisis.
So far, taxpayers have pumped about $116 billion into Fannie, although the company has paid some of that money back with nearly $20 billion in dividends to the Treasury.
It is astounding that 5 years after the housing crash we still have not learned our lesson.
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