2019 Sep 10, 5:30pm
507 views 24 comments
by Kevin Ryan @unbaisedamericaThe Trump administration has just released a sweeping plan to end more than a decade of government control of two massive companies, Fannie Mae and Freddie Mac, which back half of the nation’s mortgages.The long-awaited plan would resolve the fates of the two government-sponsored entities, which eleven years ago this week were put into government conservatorship during the global financial crisis.Fannie Mae was established by the U.S. Congress in 1938 as part of Franklin Delano Roosevelt's New Deal. Freddie Mac was established by Congress in 1970. Both companies purchase mortgages from lenders, and package them into securities to sell to investors. This in turn frees up liquidity for lenders to make additional loans.In 1992, the Democratic Congress amended the charter of Fannie Mae and Freddie Mac to require them to “have an affirmative obligation to facilitate the financing of affordable housing for low- and moderate-income families”. For the first time, they were required to meet “affordable housing goals” set by the government.In 1999, Fannie Mae came under additional pressure from the Clinton administration to expand mortgage loans to low and moderate income borrowers by increasing the ratios of their loan portfolios in distressed inner city areas designated in the Community Reinvestment Act. The annual goal for low-income and moderate-income mortgage purchases was increased to 55% of all loans by 2007.At the time, The New York Times reported that Congress’ new mandate to push the corporations towards the subprime market required “taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporations may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s.”Sure enough, when the economy entered into a recession in 2008, Fannie Mae and Freddie Mac were among the hardest hit entities. Taxpayers ended up owning both companies in 2008 when the housing market collapsed and the firms’ losses piled up.Under the Trump administration’s new plan, Freddie would be turned back into private companies but would be required to pay taxpayers a fee for government protection. It would also open the market up to competitors for the first time.The proposals will “protect taxpayers,” Treasury Secretary Steven T. Mnuchin said in a statement. “An effective and efficient Federal housing finance system will also meaningfully contribute to the continued economic growth under this Administration.”Fannie Mae and Freddie Mac represent the last major unresolved business from the financial crisis. Both Democrats and Republicans support ending government control of the companies, though it remains to be seen whether they will come together behind the administration’s plan.
How much prosperity, peace, and freedom from rackets will it take to get through to the "orange man bad" crowd?
The government does not belong in the loan business. When that happens loans are not given out based on the ability of the borrower to repay the loan. Instead it's given out based on who votes for whom. That's a bad way to do business.
Explains to kids really well how government controls value of currency.
Freddie would be turned back into private companies but would be required to pay taxpayers a fee for government protection. It would also open the market up to competitors for the first time.
What do the Trump haters think of Biden's wish to double the Federal Capital Gains tax to 40%? How is that going to affect your future financial well being? I of course didn't mention that California also has its own Capital Gains Tax. If you hate Trump you hate yourself if you have any money.
What do the Trump haters think of Biden's wish to double the Federal Capital Gains tax to 40%?
Lets now wait and see how Media will turn this into ORANGEMANBAD. Any guesses from patnetters?I propose Talking Point #1 will be TRUMP IS RAYCIST.
FortWayneIndiana saysExplains to kids really well how government controls value of currency.There is a video documentary with the same name.
Ha! I wonder if it's done by same people. This is by libertas group. They are libertarian.