Fannie May and Freddie Mac at it again. Are we really surprised?

[TacoMac]

The U.S. housing finance system is worse off today than it was on the cusp of the 2008 financial crisis, Republican lawmakers and Trump administration officials warned on Tuesday.

Fannie Mae and Freddie Mac, the two government-controlled enterprises that stand behind half the country's mortgages, are way too undercapitalized, and lending standards have actually deteriorated since the housing crash, the officials said.

“This whole thing is a car wreck. It’s a dumpster fire. We spent $190 billion of taxpayer money, and we’re in worse shape." - Sen. John Kennedy (R-La.)

“I will tell you as a safety-and-soundness regulator, when I look at a $3 trillion institution that is leveraged 1,000 to 1, it keeps me up at night. If we do nothing, this is going to end very badly." - Federal Housing Finance Agency Director Mark Calabria

What’s more, Fannie and Freddie are less equipped for a downturn now than they were before the crisis, Senate Banking Chairman Mike Crapo (R-Idaho) said. Before 2008, he said, the companies held 45 cents in capital for every $100 in mortgages; today that figure is 19 cents.
​

Emphasis mine.

As expected, they learned nothing. The housing bubble is actually bigger now than ever before. When the market starts taking a dump and people start losing their jobs, the housing crash that will happen is going to make 2008 look like a Sunday afternoon church social.

Full story: https://www.politico.com/story/2019/09/10/mortgage-finance-donald-trump-officials-1721529

 

[hanimmal]

Republicans back in power, Trump deregulating everything he can find a string to, the most irresponsible people possible being put in charge of the nations programs.

Yeah not really surprised that the banks that were legally mandated to handle all of the lower income home loans prior to the 2008 crash and regulations being put in place to (help) stop (lol, slow maybe?) predatory lending practices, is back in the news.

The U.S. housing finance system is worse off today than it was on the cusp of the 2008 financial crisis, Republican lawmakers and Trump administration officials warned on Tuesday.

They have zero credibility.

 

[TacoMac]

They have zero credibility.

Other than they're right?

 

[hanimmal]

Other than they're right?

Treasury Secretary Steven Mnuchin, HUD Secretary Ben Carson and Calabria all agreed with Crapo’s assessment that the GSEs “are systemically important companies [and] that they continue to be too big to fail.”

Yet when Sen. Mark Warner (D-Va.) pressed Mnuchin and Calabria on whether the Financial Stability Oversight Council, the uber regulator created after the crisis to spot emerging risks in the financial system, should subject Fannie and Freddie to greater oversight, they rejected the idea.

The Republicans have been trying to sink low income minority home owners since before they were forced to start giving them loans though Fannie and Freddie. They burdened them with all types of forced lending practices prior to 2008, that they had to take on all of the bad loans that the shadow banking industry pumped out (ninja loans and what not) that were garbage rated as aaa.

If they were so worried why would Mnuchin not go with the Democratic suggestion to get some more regulation in there to make sure it is being handled responsible? Maybe because then whatever shenanigans Trump is trying to do behind the curtain to get a new/old bad guy in the news would get exposed?

 

[hanimmal]

https://www.bloomberg.com/news/arti...r-trump-s-plan-for-freeing-fannie-and-freddie

Fannie and Freddie don’t make loans. Instead, they purchase mortgages from banks and other lenders and package them into bonds. Those securities have guarantees that protect bond holders from the risk of homeowners defaulting. The process provides ample liquidity for the mortgage market, keeping the housing sector humming and borrowing rates low.

The companies were taken over more than a decade ago, ultimately receiving $191 billion in bailout funds. They’ve since become profitable again, paying more than $300 billion in dividends to the Treasury in recent years.

Shares of Fannie and Freddie rose the most in almost three years on Monday following comments by Mnuchin that he was nearing a deal that would let the companies retain more of their earnings to build capital buffers.

It is funny how the Republican in the OP mentioned the $191 billion bailout, but ignored the $300 billion that they have paid back to the Treasury since, or that any excess they earn goes directly back to the treasury.

 

[Rob Roy]

 

[captainmorgan]

They want to privatize it so they can steal more from the tax payers and poor.

 

[captainmorgan]

Everything with this administration is about stealing money, they're criminals, that's what they do. They are getting rich locking people in cages. tRUmp is making noise about the homeless in cali, what do you want to bet that he wants to round them up and put them in camps and the government will be billed a fortune.