Real Reform for Fannie & Freddie
Current legislation needs to be amended in order for all investors – pensioners, community banks and individuals – to be repaid and create a solid platform for the mortgage market to thrive.
- Repayment of Pensioners, Community Banks and Individuals invested in Fannie and Freddie.
- Stricter lending standards and oversight of Fannie and Freddie.
- Affordable housing goals reinstated and upheld under stricter oversight.
Reforming Fannie and Freddie: Why it Matters
Government interference in housing market
In 2008 government bailed out Fannie Mae and Freddie Mac (Government-Sponsored Enterprises or GSEs) in an attempt to stabilize the housing market and the U.S. economy. In March 2014, Fannie and Freddie will have repaid the taxpayers and are making tens of billions of dollars in profits. Despite the taxpayers being made whole, plus interest, the U.S. Treasury continues to take 100 percent of Fannie and Freddie profits while Fannie and Freddie shareholders are left with nothing.
Legislators are seeking to reform the mortgage market system to make GSEs more accountable and to prevent a repeat mortgage crisis from happening in the future. Flaws in current proposed legislation, such as Corker-Warner and Johnson-Crapo, fail to repay those who hold shares in the two enterprises including pensioners, community banks and individuals.
It has recently been revealed in an internal Treasury memo that the Obama Administration never intended to repay investors yet continued to encourage investment in Fannie and Freddie by outside investors. This deliberate violation of market place rules not only qualifies as theft and market manipulation (securities fraud), but leaves millions of pensioners, community banks and invdividuals holding worthless paper.
- Federal Government bails out Fannie Mae and Freddie Mac with $188 billion dollars
- Government memo devises scheme to freeze out private investors (pension funds, community banks). “The administration’s commitment to ensure existing common equity holders will not have access to any positive earnins from the GSEs in the future.”
- Federal government implements plan to take 100 percent profits of Fannie and Freddie
- Government & Taxpayers Repaid: Shareholders hold worthless paper