Posted on 11/04/2010 11:13:59 AM PDT by Fred
The total cost to rescue and then overhaul mortgage giants Fannie Mae and Freddie Mac could reach $685 billion, according to estimates published Thursday by Standard & Poor's.
Fannie and Freddie have already cost taxpayers nearly $134 billion, but S&P analysts said Thursday that the government could ultimately be forced to inject $280 billion into the firms because of a slowdown in the housing market.
Any entities that might replace Fannie and Freddie would need new start-up funding that would go beyond the money already committed.
A consensus of academics, industry officials and investors has coalesced around the idea of using the government to provide explicit guarantees for securities backed by mortgages that meet certain standards. Tough questions loom over how those guarantees would be structured and priced and what entities would provide them.
(Excerpt) Read more at online.wsj.com ...
Great...spend another trillion we don’t have to clean up the mess caused by Democrat efforts to put people into houses who should have stayed in apartments, projects and section 8. And the news this week is that the whole thing was a bust and a disaster — house ownership is lower than it was a decade ago!
Where government goes, disaster is sure to follow.
Just cut them lose for pete’s sake. You do not raise a sunken ship. The Titanic would be on display in a Museum if it were feasible.
Yet, instead of being thrown in jail, Frank was re-elected.
Let these things die. In a free market system, risk management is important -- it's what makes one business more successful than another. But if major corporations believe that there are no risks -- that the taxpayers will always bail them out -- then we face disaster. The financial sector must learn that mistakes cost them a lot of money. I have no willingness to rescue or overhaul these people.
I agree. It sounds cold. But at some point America has to draw a line in the sand and this must be it.
Lefties have no sense of responsibility. Especially when it come to other peoples money. Many will be hurt by this but sometimes going cold turkey is the only answer.
Simple business model is a strange concept to them.
The mortgages are already worth nothing. There is no point in bailing F&F out.
Let them crash - and also BAC, and all the others. You guys brought garbage: the rest of us are not going to pay for it.
“”Where government goes, disaster is sure to follow.””
The government’s job is to create the problem then to correct the problem - making it all so much better!
Well, according to some votes on Tuesday, there are those who believe it.
from a couple years ago:
“Why did the Democrats block S-190?” you ask? Because Fannie and Freddie have friends in the Senate.
Sen. Chris Dodd (D-CT) is the current Senate Banking Committee Chairman. He received a sweetheart loan. In 2003 he received a cut rate $800,000.00 loan from Countrywide Financial. “Conflict of interest” you say? “Impropriety” you say? Why is Sen. Dodd still serving in the public interest? It seems that he is plainly serving the interest of Chris Dodd.
Sen. Barack Obama (D-IL) also received a sweetheart loan of $1.32 million loan from Northern Trust in Illinois at a very good rate. TOO good for the vast majority of most citizens.
Earlier in his presidential campaign, Barack Obama chose a man named Jim Johnson to head up his VP (Vice Presidential) search committee.
From 1985 until 1990, Jim Johnson was the Managing Director of Lehman Brothers, which is now recently bankrupt because of the subprime mortgage collapse.
From 1991 until 1998 – Jim Johnson was the CEO of Fannie Mae, when the CRA was expanded under the Clinton administration.
Mr. Johnson improperly deferred $200 million in expenses as the CEO of Fannie Mae. Fannie Mae underreported Johnson’s compensation, which was originally reported as $6 to $7 million. Documents show that Johnson actually received $21 million. He was a contributor to Barack Obama’s campaign and gave the personal maximum allowable donation of $4,600.00.
Currently, Jim Johnson is a wealthy private banker and is on the board of Goldman Sachs, which has donated another $700,000.00 (seven hundred thousand) to Barack Obama’s campaign, and raised another $500,000.00 (five hundred thousand) through bundling.
In June of 2008 it was announced that Jim Johnson quit as an Obama advisor because of pressure on account of his involvement in the current financial crisis.
Jim also received a sweetheart loan from Countrywide Mortgage.
Franklin Raines is Barack Obama’s housing issues advisor. Mr. Raines currently lives in a house valued at approximately $7.6 million dollars.
Raines served as an advisor in the Carter administration from 1977 to 1979 when the CRA was first enacted.
From 1980 to 1991 he was an investment banker with Lazard Ltd. From 1991 to 1996 he was the Vice Chairman of Fannie Mae, when the CRA was expanded to include subprime loans. From 1996 to 1998 he was the OMB (Office of Management and Budget) director for the Clinton administration. From 1999 to 2004 he was the CEO of Fannie Mae. He received a $25 million dollar “golden parachute” upon his departure.
He also received a sweetheart loan from Countrywide Mortgage sometime between 1996 and 2004.
Under Franklin Raines’ leadership as chairman and CEO, Fannie changed its charter to a more high-risk enterprise of buying mortgages and holding onto them. Fannie also overstated earnings by a mind-boggling $10.6 Billion and paid Raines and his management team massive bonuses tied to Earnings Per Share (EPS). Any company can hit its EPS targets if they don’t worry about minor details such as accounting rules, debt levels and risk factors.
Franklin Raines pulled in a total of $90 million between 1999 and 2003, the majority from bonuses. In 2004 the SEC (US Securities and Exchange Commission) and OFHEO (Office of Federal Housing Enterprise Oversight) sued Raines to recover some $50 million of his bonuses based on Enron-like accounting practices. Civil charges were also filed against Raines. As a result, Raines agreed to an “early retirement”, paid hefty fines and gave up lucrative retirement benefits (stock options valued at $15.6 million) for his role in accounting “errors”.
Franklin Raines resigned from Fannie Mae due to “accounting irregularities”.
From 1989 to 2008, Barack Obama received $126,349 in campaign support from Fannie Mae. This is four times more money from Fannie Mae per year than any other senator. It’s 49 times more than John McCain.
The lawfirm, “Miner, Barnhill, and Galland” sued banks for not issuing enough subprime loans. They sued Citibank. Obama was a junior lawyer on the team that sued Citibank.
What we’re seeing is bad government regulation that made banks become predatory lenders to fulfill a government mandate; to offer souped up, shell game, “Affordable mortgages.”
TRANSLATION: Taxpayers will be robbed to prop up the criminal activities of democrats over the past decade.
“You do not raise a sunken ship. The Titanic would be on display in a Museum if it were feasible.”
Jeez, why didn’t you tell Barack Obama about this? He was desperately seeking shovel-ready projects for the stimulus funds. Surely it wouldn’t have cost more than $10 to $20B to raise the Titanic and put her in a museum...
And what would their elimination cost?
Jan 21st would a great effective date.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.