"Saving Fannie and Freddie July 16, 2008
WITH ITS decision this week to rescue the mortgage finance companies
Chartered by Congress, the two mortgage giants behave largely as private firms, buying up mortgages and reselling some in the form of securities. But each has access to a $2 billion line of credit from the federal government. Treasury Secretary Henry Paulson proposed Sunday to expand the companies' line of credit, perhaps by more than 60-fold. He raised the possibility that taxpayers would inject money into Fannie Mae and Freddie Mac in exchange for equity in the two companies. Meanwhile, the Federal Reserve announced it would allow them to borrow money at a special rate.
These steps are vital to keeping the mortgage market moving. But none of this would be necessary had the administration and Congress stepped in earlier.
More government oversight of home mortgages during the first half of this decade would have meant more attention to whether borrowers could repay their loans. Instead, a proliferation of exotic loans to borrowers with iffy credit fueled a speculative frenzy. It has since given way to plunging home prices, an epidemic of foreclosures, a shakeout in the mortgage industry, and the destabilization even of Fannie Mae and Freddie Mac, which traded in loans to relatively safe borrowers.
Critics fret that the two companies' status as creations of the federal government suggests to investors that the US Treasury stands behind their obligations. But the Treasury and the Fed stepped in not because of any implicit guarantee, but because the companies have become so central to the mortgage system that their failure would hamstring the housing market. Gigantism among financial institutions is yet another problem that regulators have failed to address.
Fannie Mae and Freddie Mac aren't the first companies that the Fed and the Treasury have deemed too big to fail. Earlier this year, as the investment house Bear Stearns was about to collapse under the weight of its subprime loans, the Fed lent out public money to grease a merger with JPMorgan Chase, with Paulson's approval.
In short, an administration philosophically opposed to regulation of the financial markets now sees that only the federal government can keep market excesses from leading to economic disaster. If only that lightbulb had switched on long before now.--MORE--"
This coming from the same people who DENIGRATED and IGNORED RON PAUL!!
And the light STILL AIN'T GONE ON!!!!
But it is going on for some folks:
"Tempers flare on Day 2 of bank's takeover; Police impose order at IndyMac branches in L.A." by Los Angeles Times | July 16, 2008
LOS ANGELES - Police were dispatched to IndyMac Bank branches in suburban Encino and Northridge, northwest of downtown Los Angeles, yesterday morning when customers waiting to withdraw money became irate after several people tried to cut in line on the second day of the failed institution's federal takeover.
Police told customers to remain calm or face arrest. Three police units were dispatched shortly after 8 a.m. amid reports of a disruption outside two branches, Los Angeles police officer Ana Aguirre said.
As many as 80 people were waiting outside the Encino branch when several people tried to cut in line, officer April Harding said. Order was quickly restored at the branch and private security guards stood watch, with police acting as backup.
As the morning wore on, customers leaned over a metal railing separating them from a row of security guards and yelled complaints. Cars passing by honked in support.
--MORE--"
Oh, like they do on Saturdays when we are protesting the wars?
But some protests ARE successful, folks -- especially when you have a MSM War Daily front-paging your cause!!
"Activists help condo owner fight eviction; Rescue of Fannie, Freddie is no aid to Roxbury woman" by Megan Woolhouse, Globe Staff | July 16, 2008
The Bush administration is moving to rescue embattled mortgage backers
Thanks to the attention-drawing protest and some last-minute maneuvering by city officials, Taylor will not have to leave her condo, at least for 30 days. Her lender, Countrywide, agreed yesterday to meet with Taylor and a city mediator to discuss her housing predicament.
While taxpayers are being asked to rescue Fannie Mae and Freddie Mac, evicted homeowners have little recourse.
Rick Simon, a spokesman for Countrywide, said yesterday that it was unlikely the company would let Taylor remain in the condo longer than 30 days. He said the company's first priority is to its investors who want to see the property sold.
--MORE--"Oh, so she is fucked anyway.
So the Globe will IGNORE the antiwar folk, I see (oh, that's right, antiwar protesters make people angry) and they will ignore 8,000 people, but cover this ONE HOMEOWNER!!!
Case closed, America!
