Why Fannie Mae, Freddie Mac Went Broke

Because they follow the dictates of politicians.

Politicians, be they Republicans or Democrats, saw increased home ownership as an absolute good. They ended up sacrificing our entire economy for this false god.

Neither home ownership or any one thing is an absolute good. If you subsidize something, you will get more of it, but the price you pay will likely exceed the benefits.

Fannie and Freddie were theoretically independent agencies until they went broke last year and the federal government, as expected, bailed them out and took them over. All the easier to run the agencies as the politician’s playthings.

WASHINGTON (AP) — Government controlled mortgage finance company Freddie Mac said Wednesday it will buy back an unspecified amount of troubled loans contained in securities it has already sold to investors.

The McLean, Va.-based company said Wednesday it would repurchase mortgage loans in which borrowers have missed at least four months of payments. It did not disclose how much it would spend.

Freddie Mac guarantees the mortgage securities it sells. The company said buying the delinquent loans back would cost less than making those guarantee payments.

Freddie Mac and sibling company Fannie Mae have been run under tight government oversight since they almost collapsed in September 2008. They have required $111 billion in federal aid to stay afloat.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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