Obama Administration Considers Splitting Fannie Mae, Freddie Mac

washingtonpost.com:

The Obama administration launched a broad government effort this week to overhaul mortgage giants Fannie Mae and Freddie Mac and is considering splitting the companies and putting their troubled assets in a new federally backed corporation, administration officials said.

Read the whole story: washingtonpost.com

Comments

[sandiegoconservative]

Did he check with Barney Frank and Maxine Waters first? Afterall, they said there was no problems a few years back. Could they have been *GASP* wrong?

[mjtaylor22]

why cant we have freddie and fannie work with local housing authorities to turn these bad mortgages into affordable housing, add them to section 8, what ever and get som tennants to pay via rent, collectign som money on these mortgages will make them more marketable than mortgages on empty home.

[Progress08]

Lets start by splitting BofA, Goldman, and the other super corporations that are "Too big to fail". If it's too big to fail then it's too F'n big to exist. We can't risk the deficit and our futures on the promises of feckless thugs who'd slit their mom's throat for an extra 1% profit. Do the smart thing and start busting these companies up.

[bichn]

EXACTLY!!!!

[chocolatecity]

This may be the best idea Obama has had yet. If they can separate the toxic assets from Freddie and Fannie that will free up money to restructure mortgages and prevent some of the next round of foreclosures.

[IFTYS]

Hey Ray, is that you???
__________­__________­___

And where will this Toxic Assets go? How will the money be recovered? Unless obama plans on getting one ginormous eraser, it is highly unlikely and highly skeptical that these "troubled" toxic assets will ever eliminated from the books of Fannie and Freddie.

It is another one of obama's "Shell" games to help make the economic fiasco, that he and the dems help perpetuate, go away.

[IFTYS]

Here is an interesting article about a person who is living beyond their means. MAYBE just mayber this added to the problem we had with our financial crisis???

Living Beyond Your Means: School Bus Driver Losing Her $800,000 Home to Foreclosure
http://steadfastfinances.com/blog/2009/02/23/living-beyond-your-means-school-bus-driver-losing-her-800000-home-to-foreclosure/

Do you think this could have caused the problem? Maybe just a little?

How about the enormous amount of subprime loans that were made to lower-income borrowers target by the CRA? Forty-five percent of subprime loan originations went to lower-income borrowers or borrowers in lowerr-income neighborhoods in 2005 and 2006, where the foreclosures are almost twice as likely. This suggests that the kind of low income borrowers targeted by the CRA are likely to be responsible for the majority of subprime foreclosures.

I am not saying that CRA is the only factor here. There is plenty of blame to go around, regulators, obama-clin­ton-franks­-meeks-wat­ers-dodd-g­reenspan, derivatives desks on Wall Street. But to let CRA and its enablers off the hook is ridiculous.
http://www.youtube.com/watch?v=y4A0RuXhnQA

[MichaelLittleBig]

Hey Iftys ,
Chew on this.

From your post it would appear that you rely on gossip instead of facts.

The Bank controlled the loan application, appraisal, down payment funds ,verification and requirements, credit bureau, employment verification, title insurance, insurance, underwriters report and recommendation, flood survey report, Bank designed legal papers, deeds, mortgages, notes, disclosures, payment schedules ,maximum loan amount, closing, lien recoding and dispersal of funds.

No Buyer Had Any Control Over The Banks Loan Decision period. Did you?

The Bank Set The Rules For The Game. And you read the banking laws, rules and regulations?

The Banks Legal papers protect the Bank. Did your attorney review your banks paper work?

The Bank’s expertise and profession was in Mortgage Lending. And your expertise is?

And when the Bankers said sign here by the X :
Did you read each and every word?
Did you understand each and every word?
Or did you trust your banker to tell you the truth and rely on what they told you
as you signed by the X?

Conversely, the definition of a victim is one who trusted their banker and he betrayed them.

One and half million foreclosures have been filed just this year(2009). There have been millions and millions of foreclosures filed since 2003.
They are not all subprime loans, they are not all variable rate loans, they are not all speculators or flippers. The majority are people just like you.

Michael LittleBig
8-6-09

[IFTYS]

Hey MLB, Did the banks hold a gun to these people and force them to sign on the dotted line??? Hmmm?

It is called "Living within your means" hence you don't go out and purchase a $800K house on a $40K a year income.

Logic dictates. You on the other hand want to hold the hands of these imbeciles who thought they were getting a great deal. Nice Try.

[oldguydude]

Oh no! - What will Barney's boyfriend do now?

[olmossy]

All anyone has to do is go to the State Bank of North Dakota, ask them how to loan money at low intrest rates. and SERVE the People instead of Wall Street.

[HolyCrop]

Barney Frank in charge of one, Chris Dodd the other. Great plan.

[mhj555]

They need to keep Fannie/Freddie nationalized, and let the bad banks attract the "investors­." (ghouls)
The so called "investors are what caused this problem in the first place.

[BryanTheRegOps]

They should be broken up these banks are "Too Big Too Fail" they should all be broken up.

[Gunwing]

Vary true! AIG was just busted up and we will all be better off for it in the long run. IMHO If we bust up the banks half the cash for the Insurance companies camp against health care will be be gone in a matter of months.

[Queenhuh]

I'm all for anything that would clean up these two towers of US finance. No one in their wildest dreams or nightmares would ever have thought Freddie/Fannie could fail. "If that happens, it would mean the govt. has completely collapsed and anarchy is at the helm" someone told me just a couple years ago. Huh???

[JackRusselTerrier]

Splitting up Fannie and Freddie!
Sigh...isn­'t marriage sacred anymore.

On a more serious note: Why are we propping up the "too big to fail banks" instead of splitting them up?

[jetscan]

I asked myself the same question. But with goons like Summers and Geithner at the helm they won't let their partners in crime - WALL STREET MAFFIA - I'm afraid this will not happen. It seems that even "cool guy" Obama is on it.......

Sigh.

[mcmchugh99]

And perhaps what we really need is a national housing bank, owned by the government and operated as a public service, so people will not have to depend so much on the private banks. Maybe we need an alternative banking system that is publicly owned, to support a variety of socially useful ends.

Wall Street has proven itself to be corrupt and dishonest time and time again, and this time it has nearly destroyed the United States. It needs to be stripped of some of its power.

[tallyho1]

Who do you think owns Fannie Mae and Freddie Mac? Chris and Barney!!!! No the Tax Payers!

[olmossy]

I thought Fannie and Freddie had been changed over to private stockholder ownership years ago.

[adamsmith3]

Um, what do you think Fannie and Freddie are? They are partly government entities. They need to be sold off and be completely private and so taxpayers don't have to foot the bill of complete failure due to bad decision making. You are correct that Wall Street has proven itself to be corrupt and dishonest. It's amazing to me that you think Washington politicians have an ounce more dignity or integrity though. In the former case, in theory, at least tax payers aren't at risk when that corruption leads to company failure (or at least that was how capitalism was supposed to work before "too big to fail" destroyed real capitalism).

[banyon]

careful with the headline 'split". As a shareholder I started to freak out when i thought you meant a reverse stock split lke AIG did which almost always devestates the near term value of the stock.

[Carolab]

"The banks can then use the proceeds to offer more loans to home buyers. "

That's what it's all about. Tie more people up in debt. With unemployment rising and businesses closing.

Brilliant.

Can you say "set up"? Again?

[hopefull252]

I have posted a good opinion but the censors keep deleting it

[Carolab]

They are active tonight on weird things.