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Ear to the Ground

Treasury Digging Deeper for Fannie and Freddie

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Posted on Dec 24, 2009
Fannie Mae
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Who knew the Treasury Department had such deep pockets? Well, besides all of Wall Street, we can put the beleaguered duo that is Fannie Mae and Freddie Mac on the list. The Treasury has obligingly removed the $400 billion cap previously assigned to the funding designated to save the two mortgage firms.  —KA

AP Mobile:

The Treasury Department said Thursday it removed the $400 billion financial cap it will provide to keep the companies from failing. Already, taxpayers have shelled out $111 billion to the pair.

Treasury Department officials said the $400 billion limit would be replaced with a flexible formula to ensure the two agencies can stand behind the billions of dollars in mortgage-backed securities they sell to investors.

Fannie Mae and Freddie Mac provide vital liquidity to the mortgage industry by purchasing home loans from lenders and selling them to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion, or about half of all mortgages.

Without government aid, the firms would have gone broke, leaving millions of people unable to get a mortgage.

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By dihey, December 27, 2009 at 9:04 am Link to this comment

Fannie and Freddie are only the forerunners of the eco-financial shit that will hit the fan during the coming decade.

We must remember that there were economic ‘upticks’ between the disasters of 1919-1923 and 1928-1930.
We must also remember that nearly all recessions/depressions began with the failure of one or several banks. Fannie and Freddie are banks I believe. Their new failure might have triggered a slide back towards the so-called eco-financial abyss. However, this resuscitation effort will only postpone the coming day of reckoning for failing to nationalize our banks, even transiently, to throw out the amoral rascals including the amoral rascals in the Obama administration, and completely restructure the tottering eco-financial structure of the world.

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By antispin, December 24, 2009 at 3:39 pm Link to this comment

How did Rahm Emmanuel’s part in this escape notice here? http://firedoglake.com/2009/12/24/so-you-want-to-defend-rahm-on-fanniefreddie/

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