How much do Fannie and Freddie still owe US? Everything

GSE stands for Government Sponsored Enterprise and that is exactly what Fannie Mae and Freddie Mac are--entities created by the US Government. Fannie and Freddie were bailed out by the US government in the housing crash, but their history is filled with corruption, political contributions (some would call them "kickbacks") and other sordid tales of overpaid incompetent executives and worse--about what you would expect of any "Government Sponsored Enterprise." Now, stories appear throughout mainstream media whose implied line is to remove direct US involvement and return to the pre-bubble (i.e., corrupt) status of both organizations.  Better idea--abolish both entities and return mortgage markets to regular market entities--bankers, mortgage lenders, etc.

How much do Fannie and Freddie still owe us? - CBS News: " . . . the U.S. government stands to potentially make a profit on its massive bailout of the two mortgage giants after they unilaterally failed in the fall of 2008. This raises a bunch of new questions about the future of Fannie and Freddie. There's been a lot of talk in Washington about shifting the role the two companies have in the mortgage market and bringing private companies back to the secondary mortgage market plate. Now that Fannie and Freddie are operating as government cash cows, with all their profits going into a general fund that the Treasury may spend as it pleases, it might be harder for the government to give them up."

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Fannie Mae and Freddie Mac - deja vu all over again

With apologies to Yogi Berra--one bubble after another--the result of official US policy, from Congress to the US Treasury to the Federal Reserve (the official "bubble machine") which induces and incentivizes bubbles in the real estate industry and related financial sectors--

Fannie Mae and Freddie Mac Turn Record Profits | New Republic: "Fannie Mae and Freddie Mac now serve this securitization function by themselves. Before the crisis, they securitized around 35 to 40 percent of all residential mortgages. Now that number has risen into the high 60s. Add in Ginnie Mae, a government entity which securitizes mortgages insured by the Federal Housing Administration, the Veterans Administration and the Farmers Home Administration, and roughly 90 percent of all home loans pass through a government backstop at some point in the chain. This is dangerous, especially if the economy ever dips back into recession, leading to a wave of mortgage defaults. As Fannie and Freddie guarantee the loans they securitize, this would put the taxpayer on the hook for hundreds of billions of dollars in losses—a replay of the 2008 crisis and bailout."

When will we ever learn?

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Government owns the Housing disaster (video)

Housing Finance Market - Edward DeMarco testified on his oversight of Fannie Mae and Freddie Mac. He said more direction was needed on the future of the two government-sponsored enterprises. Mr. DeMarco’s opening statement was interrupted several times by protestors.

What to do with Fannie Mae and Freddie Mac--they have cost taxpayers billions. They were created by the federal government and became corrupt, bloated, and contributed to the housing bubble and its demise. Now the federal government is in it up to their neck. Watch the video for more.

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