“funded by the profits of Freddie Mac and Fannie Mae”
Need some help here. I know that Chris Dodd and Barney Frank were instrumental in covering up the failing Fannie and Freddie starting during the last couple of years of the Clinton administration.
This was hidden by the press when the dems in congress started putting aggressive pressure on the loaning institutions to establish loans to minorities that the institutions knew were going to fail. And that the amount of failures created the recession that really came into effect late in the Bush administration.
On September 30, 1999, a New York Times reporter, Steven Holmes published a piece titled “Fannie Mae Eases Credit to Aid Mortgage Lending”. The crux of the story was that Fannie Mae was lowering its credit standards, which in turn would increase home ownership. Franklin Raines, the then Chief Executive Officer (CEO) of Fannie Mae, is quoted in the article: “Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements. Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.’’
In other words, the backup loan agencies failed so I’m not sure where the funds were Obama could get. Currently, as of August 2010, the Treasury has injected a total of $148.2 billion into these entities. And it doesn’t look like their financial health is going to get any better. Even putting aside all future foreclosures and portfolio losses, Fannie Mae and Freddie Mac are now sitting on over 150,000 foreclosed homes. The Congressional Budget Office (CBO) projects that an additional $65 billion may be required to keep them afloat until 2019. The CBO has further estimated that the total taxpayer losses might ultimately reach the neighborhood of an astounding $350 billion.
https://research.stlouisfed.org/conferences/gse/White.pdf
I dislike Obama as much as the next free thinker that libs hate, but I’m not sure on this one.
rwood
All you have to remember is it was BJ and the Rats who invented the Community Re-investment Act (Program), CRAP. Bush didn’t want to get involved in the difficult task of “leading” and so got run over by CRAP.
F&F were not failing in 1999. They continued to deal in conforming loans throughout the bubble and their loans performed the best of any when the bubble popped, which is what conforming loans are supposed to do. The exotic non-conforming mortgages driving the bubble and that ultimately led to its collapse came out of private sector rivals to F&F.