Back in February we postulated that the reform of Fannie Mae and Freddie Mac would be the next president’s problem (whoever that may be). Recent comments by Treasury Secretary Timothy Geithner made before Congress yesterday certainly back up our claims (emphasis added):

Each of the longer-term reform options we have outlined will require legislation from Congress, and we hope to work together with you and your colleagues to pass comprehensive legislation within the next two years.

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Late last week President Obama signed a one-year extension to keep Fannie Mae and Freddie Mac’s loan limits at $729,750. H.R. 3081 not only kept the higher loan limits in place, but it also allocated an extra $20 billion to the FHA’s General and Special Risk Insurance Fund (that money is designed to keep the FHA lending at least through the end of the year, explains Housing Wire).

About two weeks ago we wrote a post titled “Here’s Washington’s chance to step aside.” After both Treasury Secretary Timothy Geithner and HUD Secretary Shaun Donovan expressed the need for the government to play a smaller role in the housing market, we thought that lowering Fannie and Freddie’s loan limits could be Washington’s first step in returning some of the market control over to the private sector. That didn’t happen.

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Number five on HSH.com’s 2010 Outlook — a document that explores “the 10 Most Important Factors for 2010’s Mortgage Market” — stated that “Fannie Mae and Freddie Mac will change.” That’s no longer the case…At least for right now.

Yesterday, Treasury Secretary Timothy Geithner announced that the GSEs will stay as is for 2010, and will not be reformed or restructured until some time next year: Read the rest of this entry »

William Black, a former regulator and S&L prosecutor, called Treasury Secretary Timothy Geithner’s stress test program “a complete sham.” Black likened the ongoing tests to a Potemkin village, a term the American Heritage Dictionary defines as “Something that appears elaborate and impressive but in actual fact lacks substance“:

“It’s a Potemkin model. Built to fool people.”

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Within the last month we have written several stories that seemed to rile up our readers more than others. Below is a list of just some of our stories that generated several comments. Join the ongoing discussion and let us know your opinion:

“(Update1) Bernanke Responds to Santelli’s Statement”

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Two weeks after President Obama announced his Homeowner Affordability and Stability Plan (HASP), the Treasury has released the guidelines to the loan modification portion of that plan. The initiative is aimed at targeting three to four million “responsible” borrowers who are struggling to stay current on their monthly payments.

“Today, we are providing servicers with the details they need to begin helping eligible borrowers,” said Treasury Secretary Tim Geithner in this morning’s press release.

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Treasury Secretary Timothy Geithner concluded his address on the government’s “Financial Stability Plan” late this morning with a candid and sincere statement: “…this strategy will cost money, involve risk, and take time.”

Yet, Geithner’s sincerity failed to make up for his vague overview. The Treasury Secretary outlined the Obama Administration’s plan of action with three main goals: “clean up and strengthen” banks, restore the natural flow of credit, and provide aid to homeowners and small businesses.

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