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MONDAY, NOVEMBER 23, 2009
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White House Weighs 'Bad Bank' Fix for Fannie, Freddie

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(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.

“It should come as no surprise that the administration is thinking through” drastic changes to the companies, a Treasury spokesman said. In an interview yesterday, the top regulator of Fannie and Freddie said the "bad bank" solution was necessary. Officials will also discuss whether to merge the “good banks” into one government agency, or return to a hybrid public/private model.

In this May 2, 2007 file photo, the Fannie Mae building in Washington is seen.
In this May 2, 2007 file photo, the Fannie Mae building in Washington is seen.   (AP Photo/Manuel Balce Ceneta, File)
In this July 13, 2008 file photo, the Freddie Mac's corporate offices are seen in McLean, Va.
In this July 13, 2008 file photo, the Freddie Mac's corporate offices are seen in McLean, Va.   (AP Photo/Pablo Martinez Monsivais, File)
In Nov. 11, 2008 file photo, Federal Housing Finance Agency Director James B. Lockhart III, attends a news conference in Washington.
In Nov. 11, 2008 file photo, Federal Housing Finance Agency Director James B. Lockhart III, attends a news conference in Washington.   (AP Photo/Haraz N. Ghanbari, file)
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4 comments
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ruserious
Aug 6, 09 11:02 AM CDT
I can't help but laugh every time I hear the informal "Fannie and Freddie," because it reminds me of when Palin repeatedly said the names together in speeches, and I always wondered whether she knew what in the hell she was talking about. Oh, I'm getting nostalgic. Reply
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Jayster999
Aug 6, 09 11:27 AM CDT
You don't know the the hell you're talking about either. You've got more in common than you think! Kumbaya!
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Jayster999
Aug 6, 09 11:24 AM CDT
Obummers economic plan = more money for rich bankers at taxpayer expense. Who would have guessed what a tool of the rich he would be? And libs think this guy is for the working class? Classic. Reply
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Blogginnoggin.com
Aug 6, 09 12:20 PM CDT
I'd like to send Barney, Paulson, and the rest to http://www.findajobnow.weebly.com Reply
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