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Tuesday, May 11, 2010


Senate Dems Vote Down GOP Plan To Reform Fannie Mae, Freddie Mac As Their Sacred Cows Ask For $19 Billion More In Taxpayer Funds

SEN. MARK WARNER (D-VA) YESTERDAY: “I Think It’s A Fair Claim To Make That We Haven’t Done Enough To Fully Address Fannie And Freddie. It Is The Big Elephant In The Room That Hasn’t Been Addressed.” (CNBC’s “Squawk Box,” 5/10/10)

Senate Democrats Like Michael Bennet (CO), Barbara Boxer (CA), Kirsten Gillibrand (NY), Blanche Lincoln (AR), Patty Murray (WA), Harry Reid (NV) And Arlen Specter (PA) Just Killed GOP Plan That Would Have Ended Taxpayer Bailouts Of Fannie Mae And Freddie Mac. (S. 3217, S. Amdt. 3839, Roll Call Vote #139, Rejected 43-56, R: 41-0, D: 2-54, I: 0-2, 5/11/10)
  • That Means Obama-Dodd Financial Regulation Bill Leaves Fannie Mae And Freddie Mac “Untouched.”Home lending giants Fannie Mae and Freddie Mac will be left untouched for now by financial reform legislation, Sen. Bob Corker (R-Tenn.) said Tuesday. Corker, a member of the Senate Banking Committee who’s been a lead Republican negotiator on a financial reform bill, said that the legislation under consideration wouldn’t deal with the two government-administered companies, but that lawmakers hope to revisit regulation of the companies soon. ‘I would have liked to have seen the Fannie and Freddie reforms in this bill,’ Corker said during an appearance on CNBC. ‘They’re not going to be in this bill.’” (Michael O’Brien, “Corker: Fannie And Freddie Left Out Of Financial Reform Bill,” The Hill’s “Blog Briefing Room,” 3/9/10)
Senate Dems Choose To Keep Fannie, Freddie Under Government Ownership, Which CBO Says Will Cost Taxpayers $389 Billion Over The Next Decade. “The Congressional Budget Office estimates that the total drain on taxpayers from bailing out Freddie Mac and Fannie Mae will be $389 billion through 2019.” (Jia Lynn Yang, “Freddie Mac Asks U.S. For $10 Billion As Losses Pile Up,” The Washington Post, 5/6/10)
  • Fannie And Freddie Will Likely “Be The Most Expensive Legacy” Of The Financial Crisis. “Fannie Mae asked the U.S. government for an additional $8.4 billion in aid after posting an $11.5 billion net loss for the first quarter, the latest sign that the bailout of the mortgage investor and its main rival, Freddie Mac, is likely to be the most expensive legacy of the U.S. housing-market bust.” (Nick Timiraos, “Fannie Mae Needs $8.4 Million More,” The Wall Street Journal, 5/11/10)
President Bill Clinton Admitted His Policies Regarding Fannie Mae, Freddie Mac Paved Way For Current Financial Crisis. “Clinton ... said that Democrats weren’t entirely blameless, stating that they should have highlighted problems with Fannie Mae and Freddie Mac and ‘tried more aggressively to regulate derivatives.’ He also acknowledged that there was possible danger in his administration’s policy of pressing Fannie Mae, the mortgage company, to lower its credit standards for lower- and middle-income families seeking homes. ‘I think, through the lens of this, it looks like that was true,’ Clinton said.” (Walter Alarkon, "Clinton Rejects Blame For Financial Crisis," The Hill, 9/25/08)
  • And Says That Blame For Crisis Rests With Democrats And His Administration For Resisting GOP Efforts To Reform Fannie And Freddie.  “I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress, or by me when I was President, to put some standards and tighten up a little on Fannie Mae and Freddie Mac.” (Seth Colter Walls, “McCain Ad Uses President Clinton To Bash Democrats,” The Huffington Post, 10/31/08)
Fannie Mae Asks For $8.4 Billion In Taxpayer-Funded Bailouts This Year, After Already Receiving $84.6 Billion In Bailout Funds. “Fannie Mae, the largest U.S. residential mortgage funds provider, on Monday asked the government for an additional $8.4 billion after the company lost $13.1 billion in the first quarter. Including the latest request, Fannie Mae will have received more than $84.6 billion from the government, and the firm said it saw no end in sight to federal assistance.” (Corbett B. Daly and Lynn Adler, “Fannie Mae Seeks $8.4 Billion From Government After Loss,” ABC News, 5/11/10)
  •  And Freddie Mac Asks For $10.6 Billion Taxpayer-Funded Bailouts This Year, After Already Receiving $50.7 Billion In Bailout Funds, Totaling $19 Billion In Requested Money Between Two Housing Giants. “Since taking over Freddie, the government has provided $50.7 billion in help to the company. This new request for funds from the Federal Housing Finance Agency, which regulates Freddie and Fannie, would push that total to $61.3 billion.” (Jia Lynn Yang, “Freddie Mac Asks U.S. For $10 Billion As Losses Pile Up,” The Washington Post, 5/6/10)
NYU Finance Professor Says “It’s Outrageous” That Reform Of Fannie Mae And Freddie Mac Not Included In Obama-Dodd Bill. “Lawrence J. White, a finance professor at New York University, said it made no sense to overhaul financial regulation without addressing the future of federal housing policy. He said he was trying to find the strongest possible words to describe the omission of Fannie Mae and Freddie Mac from the legislation. ‘It’s outrageous,’ he finally said.” (Binyamin Appelbaum and Sewell Chan, “Senate Financial Bill Misguided, Some Academics Say,” The New York Times, 5/3/10)
  • And Joined Republicans Who Have “Repeatedly Criticized The Administration For Advancing Legislation That Does Not Address” Fannie And Freddie. “A second group of critics say the government helped to seed the crisis through its efforts to increase home ownership, including the role of Fannie Mae and Freddie Mac in buying mortgage loans to make more money available for lending … Republicans have repeatedly criticized the administration for advancing legislation that does not address the companies’ future.” (Binyamin Appelbaum and Sewell Chan, “Senate Financial Bill Misguided, Some Academics Say,” The New York Times, 5/3/10)

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