Taxpayers May Still Be Forced To Bail Out Fannie Mae and Freddie Mac
ALEXANDRIA, Va. — Five years after the housing collapse of 2008, the government’s role in the mortgage market could still have taxpayers on the hook for another multibillion-dollar rescue of Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency took over both government-sponsored enterprises in 2008 to ensure their solvency in the wake of the housing crisis. FHFA managed their finances and portfolios through a massive taxpayer bailout totaling $187 billion.
WARNING: Government-backed mortgage giants Fannie Mae and Freddie Mac have been in conservatorship since July 2008. Some economists worry another economic downtown would lead to a massive bailout of the pair. (AP photo)
But in more than four years of financial oversight by the FHFA — known as conservatorship — there has been little talk of reforming Freddie Mac and Fannie Mae by either shuttering them, converting them to private companies or allowing them to remain government-backed enterprises with modest reforms.
Source: Watchdog.org. Read full article. (link)
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"Five years after the housing collapse of 2008, the government’s role in the mortgage market could still have taxpayers on the hook for another multibillion-dollar rescue of Fannie Mae and Freddie Mac."
Of course they are. Who thought otherwise. If anything, the government's role in backing mortgages has increased.
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Taxpayers *may* be forced? Yeah, the sun *may* rise tomorrow also. Forbes has been squawking about Fannie and Freddie and the moral hazard of implicit government (taxpayer) guarantees since 2005.
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Forbes also praised Obama's unprecedented fiscal restraint.