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September 5th, 2008 (Modified on September 8th, 2008)

Treasury To Bail Out Fannie & Freddie?

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Various news outlets have published stories this evening that claim the Treasury Department is close to a deal with mortgage giants Fannie Mae and Freddie Mac. From The Wall Street Journal:

WASHINGTON — The Treasury Department is putting the finishing touches to a plan designed to shore up Fannie Mae and Freddie Mac, according to people familiar with the matter, a move that would essentially result in a government takeover of the mortgage giants.

The plan is expected to involve putting the two companies into the conservatorship of their regulator, the Federal Housing Finance Agency, said several people familiar with the matter. That would mean the government would take the reins of the companies, at least temporarily.

It is also expected to involve the government injecting capital into Fannie and Freddie. That could happen gradually on a quarter-by-quarter basis, rather than in a single move, one person familiar with the matter said.

We’ll keep you posted on any new developments.

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4 Responses to “Treasury To Bail Out Fannie & Freddie?”

  1. Chas.Youngs Says: September 15th, 2008 at 11:53 pm

    First These wise words:
    If you have always believed that everyone should play by the same rules and be
    judged by the same standards…….
    This would have gotten YOU labeled:
    1. A radical 50 years ago.
    2. A liberal 25 years ago.
    3. A racist today.
    Thomas Sowell (born June 30, 1930), is an American economist,
    social commentator, and author of dozens of books.

    THIS IS A SHOCKING STORY – that will cost you.

    “The government bailout of Fannie Mae and Freddie Mac is the greatest fraud in American history and the entire media
    (EXCEPTING THIS) is totally silent about WHY.”

    Here are results of research I did in my quest to verify a feeling I had.
    A hunch came to me because of our predictably dishonest P.C. world.
    (I’m no psychic but you do not need to be)

    So check this out if you wonder about what will rule Americas future….

    The NINJA loan- No Income No Job or Assets -

    Nobody is exposing this.

    Yet.

    DID YOU KNOW……
    Over the past weekend our nations debt may have even DOUBLED.
    *(Wall Street Journal – Sep 8, 2008 To put this in context, that would probably double next year’s likely federal deficit.)

    Finally to suface is……..Easy, SIMPLE, Understandable
    Speculation on why :
    Because of American MINORITIES apparent entitlement to own a home. (Whether or not they can meet payments…..)
    NINJA Loans are (NoIncomeNoJob/Assets)

    The Fannie Freddie fallout (bail-out) rose our
    debt to many + Trillions.
    …but nobody will own up to WHY..
    ….or even put it on the news (Except to blame those “predetory evil bankers”.)

    But NOW, in this age of information…..we can find out things ….

    things that are not biased RIGHT or LEFT …..but factual things like
    sound bytes that you can hear by our leaders in meetings ……

    so, If you need some evidence I have finally located some.

    What I have realized is what may turn out to be
    an under the radar ARM program, perpetrated or
    perhaps initiated by W and (I believe) a lobby P.C. HUD government QUOTA mission-.

    Basically regulating low loan ARMS be given only to MINORITIES….(W. specifically quotes Hispanics and African Americans on one byte.)

    The ARMs were planned only to work if rates DO NOT ever rise-
    However, rates did rise- Hence the fall-out – Hence YOUR BAIL OUT!

    Nobody is talking about this – even while everyone asks-
    WHY did this happen?

    Listen to these W sound bytes. Then you decide…..WHY?!

    (I feel) This is an American P.C. scam that is routed in
    P.C. racism and favoritism (of chosen races) at its exalted max.

    Any other banking company would have had to answer to somebody if something went wrong. Why is it that
    not the case in the Fanny Mae and Freddie Mac?

    There should be an official hearing on the bailout of these two companies. They are bailing-out with our childrens futures…..

    BUT instead: Who gets the blame????

    The more popular (but I believe false reason) is concluded by
    the P.C. News Shills who blame the Bankers….
    “Those ugly predatory bankers who descended down on the little guy and lure out these LOW ARM loans as a way of making some money.”….

    Only then, later when rates rise – tricking the poor unfortunate little guy
    AND then taking thier house away when the ARM rate rises. (oh, sure)

    This smoke and diversion theory (in my opinion) Is totally WRONG.

    BANKING 101:
    Ask the Q: What bank ever wants a loan to default ?
    Every book EVER written on foreclosures says the bank is never in the foreclosure biz by choice….
    A: NONE.

    It is much more likely that ……

    These banks were mandated to make ULTRA LOW rate ARM P.C. loans
    to select MINORITIES under quotas……

    Until now, This feeling I had was hard for me to prove and
    (in today’s PC world) it comes across like unbridled RACISM on my part
    when I try to explain it…..This too is why the media hides from it.

    These W speach HUD sound bytes will give you a solid idea. You decide.

    Know this too :
    No
    Newspapers or even CABLE TV news or RADIO TALK- Nobody!
    I mean NOBODY is talking about these trillions of dollars SCAM
    until (finally thank god) this past week.

    This was a cover up of Trillions ! The biggest heist in history !!!

    THIS IS A SHOCKING STORY – that will in fact cost you.

    These trills belonged to you and your future kin like your G.G.G.G. Grandchildren. and- It will cost us too…..

    Yes. This should piss you off!!!

    but, I could be wrong…….
    Perhaps it was just slick bankers wanting to cheat people out
    of their house after all ! I must go now as a pig has just flown
    in my window.

    ENJOY this interesting EXPOSÉ.

    Chas.

    Listen to the W byte podcast that has the date 09/8/08 on this link page:

    http://www.910knew.com/podcast/savage.xml

    or see if these will work:
    Michael Savage 9/8/08 H1
    Monday, September 08, 2008, 6:58:28 PM
    Bush bails out his bank buddies, Fannie May & Freddie Mac. Some are making a fortune out of this deal, but nobody else is talking about it.

    Michael Savage 9-8-08 Hour 1.mp3

    Here is a logical good read:
    http://isteve.blogspot.com/2008/07/treasury-announces-bailout-plan-for.html

    Here is another good read:
    Rescue plan of for Fannie and Freddie can double the budget deficit over the next seven years – failure of Capitalism?
    Fred Day
    Sep. 6, 2008

    It sounds good. But it is temporary relief without targeted drug delivery for the cancer patient.

    The US Treasury has a rescue plan for Fannie Mae and Freddie Mac, the two struggling government-sponsored mortgage groups whose fate is key to the future of the US housing industry and financial markets.

    The plan could involve a government takeover of the two giant mortgage financiers by putting the two companies into the temporary conservatorship of their regulator, the Federal Housing Finance Agency, said people close to the talks.

    This can mark the end of so called big buzz Capitalism and start of American version of socialism. No matter who gets elected, America is now destined to become a socialist country.

    The initial cost of ‘nationalizing’ Fannie and Freddie is $150 billion. But even conservative estimates call for $2 trillion in deficit increase over the long run. The estimate of what kinds of funds are needed is just a speculation.

    $150 billion is what is needed now. Perhaps the same will be needed in every quarter.

  2. Tim Manni Says: September 19th, 2008 at 3:16 pm

    Chas — We appreciate your interesting comments, and thanks for reading. Unfortunately our national debt is humongous and growing ever still! Most can agree on the faulty lending habits many lenders participated in. Risky investments in real estate and mortgage securities have crippled many financial institutions (Lehman, AIG). In my opinion, one of the major discrepancies with Fannie and Freddie was that they were a quasi-government entity. They were partially private which led to extensive salaries, yet provided much of the support for our countries mortgage industry. It may get worse before it gets any better.

    Thanks for reading,
    Tim

  3. Henry Von Loga Says: September 30th, 2008 at 10:51 am

    Water Under the Bridge. The Bail out of Fannie Mae and all those other Rip-off banks and financial Contol artists, reminds me of a Story I heard once about a truck that was tooo big to fit under the Bridge. All the Kings horses and all the kings Men (ie: the so-called experts engineers, workers couldnt figure out a way to safely get the truck under the Bridge: It took two curious kids playing near by to solve the problem. They looked at the situation and told the Men there to simply “LET THE AIR OUT OF THE TIRES” Woooow, guess what. IT WORKED. My point is the Financial
    crisis on wall street coursed by the housing crisis could be as easy to solve as letting the air out. But what do I know about these things…..May I suggest this: “WHY DONT THEY LOOK AT ALL THE CURRENT HOMEOWNERS WHO CURRENTLY HAVE SUBPRIME HOME LOANS AND FORGIVE THEM OF 20 TO 50 % OF THEIR LOANS. RATHER THEN JUST GIVING MONEY TO THOSE WHO COURSED THIS SITUATION. I BET WE WILL BE AMAZED OF THE RESULTS…THE SOLUTIONS THAT ARE BEING TOSSED AROUND BY REPUBLICANS AND DEMOCRATS IN THE HOUSE ARE ALL BARKIN UP THE WRONG TREE IN SOLVING THIS PROBLEM..

  4. Tim Manni Says: September 30th, 2008 at 12:45 pm

    Henry — I think there are a lot of people out there who would agree with you. According to Stephen Scharzman, the chairman of Blackstone Group, the US went from subprime loans representing 2% of total loans in 2002, to 30% in 2006. That’s a major problem that needs to be cleansed from the market.

    Thanks for commenting, please visit again,

    Tim

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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