Fannie/Freddie: It's Bad, but It Could Be Worse

Madcap weekend recasts Treasury Secretary in Clintonian mold

(NEWSER) - Henry Paulson had a very busy weekend. The treasury secretary had been formulating contingency plans for bailing out beleaguered Fannie Mae and Freddie Mac for weeks, but Friday’s crisis came before those plans were in place, the Wall Street Journal reports in a reconstruction of events leading to the rescue, culminating in the frenzied weekend scramble to negotiate the particulars with the Fed and Congress. More»

White House asks Congress to approve package

(NEWSER) - After a frenzied week that saw Fannie Mae and Freddie Mac teeter near collapse, the US Treasury and Federal Reserve are seeking to save the nation's two largest mortgage finance companies. Officials say that the plan, if approved by Congress, will let the government buy billions of dollars in Freddie and Fannie stock and lend them money to cover short-term needs, the New York Times reports. More»

US accuses them of dodging due diligence as crisis fallout spreads

(NEWSER) - The Federal Housing Finance Agency—the agency behind Fannie Mae and Freddy Mac—has filed suit against more than a dozen big banks for their role in the mortgage meltdown mess. The feds, seeking billions in compensation, accuse the banks of misrepresenting the quality of mortgage securities, reports the New York Times . The suit accuses institutions including Bank of America, JPMorgan Chase, Goldman Sachs, and Deutsche Bank of failing to perform proper due diligence and missing evidence that borrowers’ incomes were inflated or falsified. More»

Americans spend $24.2 million to defend executives

(NEWSER) - Taxpayers have spent more than $160 million defending Fannie Mae and Freddie Mac in fraud lawsuits since the government took over the companies in 2008. The closely guarded cost was released last week after Rep. Randy Neugebauer requested the figures last year. Some $132 million of the total went to defend Fannie Mae, mostly over lawsuits and accounting probes that occurred before the subprime crisis; $24.2 million was spent on the defense of three of the mortgage firm’s ex-bosses, the New York Times finds. And the payments continue. More»

(NEWSER) - The White House’s National Economic Council will meet today to discuss a drastic overhaul of beleaguered nationalized mortgage dealers Fannie Mae and Freddie Mac, the Washington Post reports. Among other proposals, officials are contemplating a “good bank, bad bank” split. Fannie and Freddie would dump their troubled loans on a new, government-created company that would work to collect the outstanding balances, giving the mortgage giants a clean slate. More»