Congress Decides Taking Money From Freddie Mac and Fannie Mae For Housing Fund
Is there any money that is out of the new Congress’s reach? Fannie Mae and Freddie Mac, the two quasi public private mortgage funding companies are facing the long arm of Congress reaching into their pockets to the tune of 500 million dollars a year to fund new housing initiatives.
The hypocricy is that these politicians is that they are claiming it is not a tax. But they are lying like only a politician can. It is not a tax on the general public but on the shareholders of 1 company. If the government takes money from anyone in the general public, being either a company or a person, it is a tax.
Frank said the funds will go to communities without increasing government spending or the deficit. He was joined at a press conference Thursday afternoon by several community groups and lawmakers including Reps. John McHugh, R-N.Y., and Maxine Waters, D-Calif., who are among the bill’s co-sponsors.
The House approved diverting some $500 million to $600 million of profits from Fannie and Freddie to an affordable housing fund in May, when it cleared an overhaul of rules on the two government-sponsored enterprises. The bill introduced Thursday includes those funds.
Some Republicans objected to taking money from Fannie and Freddie, saying it would amount to a tax on home loans financed by the companies.
While there hasn’t been action on the fund in the Senate, Frank said Thursday he is “optimistic” that there will be soon. He said he has spoken with Sens. Charles Schumer, D-N.Y., and Jack Reed, a Rhode Island Democrat, about the proposal.
The bill would put between $800 million and $1 billion a year into the fund, for 10 years. Sixty percent of the funds would go directly to local communities while the remainder would go to states, Indian tribes and other recipients. via CNN Money
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Pingback by More Good to Go’s for the Weekend Reading Pile . . . « Trading for the Masses on 30 June 2007:
[...] Decides Taking Money From Freddie Mac and Fannie Mae For Housing [...]
Comment by Phil Collins on 31 July 2008:
This is the opinion of Robert Sheridan, the CEO of a successful Chicago real estate & development company, Robert Sheridan & Partners. Their site is http://www.sheridanpartners.com/market.php.
Not All Financial Woes Are Created Equal
The failure of Indymac Bank – according to The New York Times the largest lender to fail in more than two decades – can be laid squarely at the feet of the lax (or nearly non-existent) underwriting that is part of (a big part of) the sub-prime mess. The chickens simply came home to roost.
The troubles of Fannie Mae and Freddie Mac are quite different. Freddie and Fannie underwrote loans carefully; their difficulties are a result of the unprecedented decline of home values.
In 2006, going against the conventional wisdom that single-family home prices never decline (they might stop rising for awhile, but they never decline), we predicted that single-family prices could decrease 10 to 20 percent. Painfully, that forecast turned out to be very correct – but also optimistic. We’re in a cycle now in which housing declines already are greater than at any time since the Great Depression of the 30s. And we’re not at the bottom yet.
If you don’t want to be disappointed by housing performance in the near term, disregard forecasts that the bottom is just around the corner – unless that corner is in Timbuktu. The bottom is NOT coming soon. And when it does arrive, it will not be obvious, like the bottom in the chart of the DJIA. The housing “bottom” will become apparent only in the rear-view mirror, when you realize that prices have stopped falling. Don’t expect a sharp rebound.
We will stay at the bottom for quite a while. How long that lasts will vary, as always, market-by-market.