Freddie and Fannie Say They Need More Money, Won’t Repay Taxpayers Soon
EmailABC's Matthew Jaffe reports from Washington: Government-sponsored mortgage giants Fannie Mae and Freddie Mac will likely need more federal aid and will not be able to repay nearly $100 billion in taxpayer funds anytime soon, their regulator told Congress Thursday. Edward DeMarco, the Acting Director of the Federal Housing Finance Agency, said the mortgage giants face a “troubled” short-term future and will “likely require additional draws” on a senior preferred stock purchase agreement with Treasury. The FHFA was created in 2008 to serve as Fannie and Freddie’s regulator and conservator. To date, the two government-sponsored enterprises have drawn $96 billion from the Treasury program. At a hearing this morning of the Senate Banking committee, DeMarco was asked if taxpayers will recoup the money provided to the mortgage giants. “I don’t envision any way in the near term for that money to get paid back,” DeMarco told lawmakers. Combined, Fannie and Freddie own or guarantee over half of all mortgages in this country, but they have been hit hard by the financial crisis. In the last two years, the mortgage giants have suffered from a combined $165 billion in losses as defaults have added up. According to DeMarco’s prepared remarks, Fannie and Freddie are now dealing with seriously delinquent mortgage rates of 4.2 percent and 3.1 percent, respectively. “It is troubling to me that they’re continuing to rise,” DeMarco told the panel at the hearing, noting that rising unemployment – currently at a 26-year high of 9.8 percent – has seriously influenced the increase in nationwide delinquency rates. As part of the hearing’s second panel, William Shear of the Government Accountability Office said the government needs to “reevaluate the enterprises’ roles, structures, and business activities in mortgage finance”. The administration has said it will release a proposal to restructure the mortgage giants when it unveils the 2011 budget in February.
RSS
Twitter
Facebook
Another screwed up government entity.
Can they do anything right???
Posted by: wis134 | October 8, 2009, 2:22 pm 2:22 pm
“Another screwed up government entity.
Can they do anything right???”
wis134 | Oct 8, 2009 2:22:01 PM
And here comes the “America sucks” brigade. I wish the Right would go back to being patriotic and having pride in their country. At least then I could feel we had at least one thing in common.
Posted by: jhw539 | October 8, 2009, 2:24 pm 2:24 pm
Did anyone really think they were going to pay back any of the funds they were given? The taxpayers always get scr*wed!
Posted by: rematenaj | October 8, 2009, 2:51 pm 2:51 pm
Not only did I not think they were going to pay back the loans, I knew they were going to ask for “More, please!”
The CEO’s and the board members got huge salaries, perks, and bonuses after the first tarp money was passed out.
What a load of you know what.
The right AND the left AND everybody inbetween SHOULD be mad as all get out!
I am. Aren’t you? We knew this was coming, but you just can’t stop the train wreck.
We should, however, change drivers of that train and get rid of the same old executives.
ALSO, we need to stop Congress from taking any contributions from these banks AND from the health care industry.
The pat answer that our politicians have is this: “I can take contributions AND do my job.”
Well – no – they apparently can’t.
We all need to stop fighting each other and focus on our politicians to see where their ontributions are coming from.
Posted by: ddg | October 8, 2009, 3:02 pm 3:02 pm
Where in the Constitution does it say we NEED to have a government sponsored BANK???? Taking from working men and women to subsidize companies that DONATE TO CONGRESS is criminal!!!!! Years ago there would be a revolution but so many are scared and feel powerless because of the strong military and police that are there to keep the masses in line. Who ever dreamed there would be a safety net for business and not the people??? This country is being ruined by selfish and greedy politicians and those that bankroll them in order to get grants, subsidies and bailouts! I am sick over it all.
Posted by: Hege1321 | October 8, 2009, 3:10 pm 3:10 pm
“Another screwed up government entity.
Can they do anything right???”
wis134 | Oct 8, 2009 2:22:01 PM
And here comes the “America sucks” brigade. I wish the Right would go back to being patriotic and having pride in their country. At least then I could feel we had at least one thing in common.
Posted by: jhw539 | Oct 8, 2009 2:24:06 PM____Not true, I am a progressive, and can honestly say both parties are only in it for themselves.
Posted by: Hege1321 | October 8, 2009, 3:11 pm 3:11 pm
Apparently, Fannie & Freddie have been left out of the billions from the mortgage modification program 0bama touted today.
Posted by: Take a Load off Fannie | October 8, 2009, 3:28 pm 3:28 pm
Well, we are definitely guilty of not shaking them up enough when we poured hundreds of billions into these guys. When Obama says restructure in 2011 – he means pour more cash into them. This is getting out of control. They are like kids that keep asking for more and more money.
We’ve got to stop the outpouring of money to these clowns. It is very much giving lots of people the “too big to fail” image – and they are taking advantage of it.
The same needs to hold true with GM. I’ve read lately that they are not doing very well. At some point we need to decide to let them go under rather letting them be a fixed nationalized money sink. No more money for them either.
Posted by: Jon F | October 8, 2009, 3:30 pm 3:30 pm
You expected something different?
Just what jobs have been created for all of those families out of work?
Posted by: Rick McDaniel | October 8, 2009, 3:42 pm 3:42 pm
This goes for republicans, democrats, and independents: They all do the same taking of contributions.
We need to stop fighting each other and FOCUS on our senators who are taking big bucks from our banking institutions and from the health care industry.
Their pat answer is: “I can receive contributions and do my job, too.”
That is NOT true. They have NOT been able to do both sufficiently as provened by their track records of not regulating the banks and health care industries.
When are we all going to wake up and see that our senators let us down?
Again – this goes for ALL parties.
The politicians want us to focus on each other instead on them so they can continue to receive the big bucks.
Posted by: ddg | October 8, 2009, 4:00 pm 4:00 pm
Look! don’t worry about Freddie Mac and Fannie Mae, Obama and the Democrat’s will find away to pull the wool over the publics eye and print more money and bail them out again and again and again forever. Don’t forget! You bright people out there voted for Obama and the Democrat’s. America’s new Motto now is -AMERICAN’S LOVE TO BE CONNED!!!
Posted by: John Demeter | October 8, 2009, 4:34 pm 4:34 pm
And the beat goes on……………
Posted by: LongT | October 8, 2009, 4:37 pm 4:37 pm
I have student loans through these knuckleheads. Ironic how they lobbied to make it impossible to declare bankruptcy over student loans, yet they in turn demand money from the taxpayers, again and again to cover the losses of their excessive rates and delinquencies. Gimme a break. Force them to declare bankruptcy or restructure. Period. There are no more bailouts. We “the people” cannot afford it anymore. Thanks in part, to the bailouts resulting from their own greed and incompetence. Let them sink in debt like the rest of us. Whats good for the goose…
Posted by: Klatu | October 8, 2009, 5:22 pm 5:22 pm
Any of the folks that are complaining about this running for Office anytime soon. Easy to sit back and pass judgement. I bet none of you have stood in a soup line either.
Posted by: texas outlaw | October 8, 2009, 5:28 pm 5:28 pm
Should this story be filed under Hope? Change? Or green shoot?
Posted by: Mary | October 8, 2009, 5:50 pm 5:50 pm
“These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” – Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee, 2003.
Don’t worry, though. Frank is in Washington “fixing” the problem he helped create. The results speak for themselves.
Posted by: Jenn | October 8, 2009, 5:56 pm 5:56 pm
They need plenty of millions to blow on bonuses for a couple of execs.
Posted by: blitherer | October 8, 2009, 6:25 pm 6:25 pm
Barney Frank did indeed help create this mess with Fannie and Freddie.
Isn’t it special that he continues to give his opinion.
He’s one of the foxes guarding the hen house.
Posted by: Barney: the special man strikes again | October 8, 2009, 6:31 pm 6:31 pm
A pretty good predictor of how any kind of government “health care” program will end up.
Where is the ABC “investigative reporting” on the Fannie/Freddie issue? Nowhere. No look into Barney Frank, Chris Dodd, Franklin Raines, Jamie Gorelick, Clinton, Carter, Bush, or the liberal push for risky Fannie/Freddie backed loans.
You guys are more interested in Sara Palin’s $100,000 ward robe than the government flushing away hundreds of billions….and now repeating themselves again.
No wonder people go to alternative media for the real story.
Posted by: RM Edaps | October 8, 2009, 8:06 pm 8:06 pm
Barney Frank is the one who gave out unqualified mortgages for YEARS! Put this guy, in PRISON, along with his slimy co-hort, Chirssie Dodd. Obamakins also pressured them to do this when he worked for the corrupt Acorn, in Chicago. Who has to suffer? THE AMERICAN PEOPLE.
Posted by: Don | October 8, 2009, 8:07 pm 8:07 pm
The federal government and local government should and must not grant “Fannie Mae” and “Freddie Mac” any more grant aid money. Government-sponsored mortgage giants will not in any way help home owners or the economy. Fannie and Freddie are now dealing with seriously delinquent mortgage rates of 4.2 percent and 3.1 percent, respectively. They are in no position to repay the same as a person that earns $20,000 a year and is sold a $300,000 house. “Fannie Mae” and “Freddie Mac” has no intension of paying back the first grant or helping home owners. Those mortgage firms are not concern with helping this great country. They seeking ways too get money from government and from home owners.
Posted by: Johnnie M. Ashley | October 8, 2009, 8:10 pm 8:10 pm
Well Obama and Freddies old corrupt CEO have been buds for a long time, with Obama calling him one of his advisors—-say bye bye to more taxmoney. It will certainly get flushed down the corruption hole we have in Washington.
Posted by: PotatoeGater22 | October 9, 2009, 2:36 am 2:36 am