Posted by
Defend America on Saturday, December 26, 2009 3:39:30 PM
U.S. Move to Cover Fannie, Freddie Losses Stirs Controversy
The Obama administration's decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday.
The Treasury announced Thursday it was removing the caps that
limited the amount of available capital to the companies to $200
billion each.
Unlimited access to bailout funds through 2012 was "necessary for
preserving the continued strength and stability of the mortgage
market," the Treasury said. Fannie and Freddie purchase or guarantee
most U.S. home mortgages and have run up huge losses stemming from the
worst wave of defaults since the 1930s.
"The timing of this executive order giving Fannie and Freddie a
blank check is no coincidence," said Rep. Spencer Bachus of Alabama,
the ranking Republican on the House Financial Services Committee. He
said the Christmas Eve announcement was designed "to prevent the
general public from taking note."
Treasury officials couldn't be reached for comment Friday.
http://online.wsj.com/article/SB126168307200704747.html?mod=WSJ_hpp_MIDDLTopStories