Tag Archives: finance giants

Key Democrats Push Fannie, Freddie To Write Down Mortgage Principle

Taxpayers have already put out nearly $200 billion to prop up Fannie Mae and Freddie Mac. They are on the hook for hundreds of billions more. Key Democrats are pushing the regulator of Fannie and Freddie to write down mortgage … Continue reading

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Good Luck To Uncle Sam In Collecting From 17 Banks

The United States is suing 17 major banks over mortgage bonds they sold to Fannie Mae and Freddie Mac. The US claims that the banks sold fraudulent bonds. That the banks knew that the mortgages backing up the bonds were … Continue reading

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Obama Desires Big Role For Government In Mortgages

Until I read this article in yesterday’s Washington Post, I thought all sides were agreed that the federal government needed to reduce its role in the mortgage market. Fannie Mae and Freddie Mac have so far cost taxpayers $166 billion … Continue reading

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What Are The Implications Of A Lowered Credit Rating For US?

Well, what would happen if you got a lower credit rating? Your cost of borrowing would increase. Perhaps your credit limit would be reduced? Higher mortgage rates are a definite possibility as a result of S&P’s lowered credit rating for … Continue reading

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Will Abolishing Fannie Mae, Freddie Mac Be Difficult?

Liberals and conservatives agree that Fannie Mae and Freddie Mac need to be rolled up. These two agencies have cost taxpayers hundreds of billions of dollars in bailouts. If Fannie and Freddie were rolled up too quickly, however, the housing … Continue reading

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Toxic Loans Infect Fannie, Freddie’s Balance Sheet

How did Fannie Mae and Freddie Mac get so many toxic loans on their balance sheet? Was it the result of inadequate government regulation? No! It was the direct result of government regulation. Starting under Bill Clinton, and carried on … Continue reading

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Fannie Mae, Freddie Mac Slow To Report Fraud

GSEs like Fannie and Freddie don’t have the same incentives as a private company. If Fannie and Freddie screw up, they just get bailed out by the taxpayers. Investors in Fannie and Freddie accept lower returns in exchange for the … Continue reading

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Do We Need Federal Support For Home Loans?

Is home ownership always a great thing? Does the government need to subsidize it? Why not let the private sector sort it all out? Generally speaking, Republicans prefer free market solutions and the Democrats prefer to intervene with the government … Continue reading

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Will U.S. Reduce Its Role In The Mortgage Business?

There seems to be consensus that the United States needs to reduce its role in the mortgage market. Currently Fannie and Freddie back more than 90% of new mortgages. These two GSEs have sucked up $150 billion in taxpayer subsidies. … Continue reading

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Mortgage Putbacks

Reselling mortgages allows banks more money to lend. If they held on to a 30-year mortgage, they’d have to wait about 30 years before they could lend that money again. So selling mortgages makes the mortgage market more liquid. But … Continue reading

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