(Source: New York Post Abby W. Schachter) – The government-backed mortgage finance houses Fannie Mae and Freddie Mac have sucked up $65 billion in taxpayer bailout funds. But it’s not enough.  Freddie Mac wants $1.5 billion more and Fannie Mae has requested $5.1 billion to make up for continuing losses from the housing market.  And now that Standard & Poor’s has downgraded US credit to AA it means Fannie and Freddie need more money to guarantee home mortgages so these financial behemouths were on unsustainable financial footing before and now it is even worse.But why should the Treasury Department approve their request? Well, because they are necessary for preventing a complete collapse of the housing market say some analysts. Though, even supporters of Fannie and Freddie understand they have to change. “Fannie Mae and Freddie Mac should go back to Fannie’s pre-1969 role as a public corporation run entirely by the government,” said Robert Kuttner of the Demos think tank. He added, “They should not be in the business of facilitating complex financial slicing and dicing. Prior to 1969, Fannie Mae worked like a Swiss watch.”

Source: New York Post Abby W. Schachter

8:43 AM, August 10, 2011

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