Obama nominee content to see Fannie and Freddie killed off

by MPA01 Jul 2013
President Obama's pick to head Fannie and Freddie is content to see the mortgage giants killed off, it has been reported.
 
U.S. Representative Mel Watt - President Obama's nominee to oversee Fannie Mae and Freddie Mac - has told a Senate hearing that he would welcome current legislative proposals to kill off the government-sponsored entities, Reuters has reported. Early last week, a bipartisan bill was introduced which would replace Fannie and Freddie with a privately capitalized system. Watt told the Senate hearing he supported efforts to reform the mortgage system.
 
"The good news is that a broad consensus has emerged on the direction that our next steps must take us - towards a system driven by private capital that minimizes the risk to taxpayers," Watt said.
 
While Watt may have voiced support for popular efforts to see the U.S. government's role in the mortgage market reformed, his confirmation may face an uphill battle with Senate Republicans. Watt has implied that he could consider a proposal to reduce loan principals for underwater borrowers, Reuters said. But Watt vowed that, if confirmed, his decision on the matter would be "responsible".
 
"You should have no doubt that I will be a strong and aggressive advocate for the taxpayers in this role."

COMMENTS

  • by CharlieG | 7/1/2013 9:46:24 AM

    It never would have come to this had the CRA not been enacted. Government interference in the private sector seldom is successful. In this case, both Fannie and Freddie were doing well, despite the fraud by Franklin Raines and Jamie Gorelick, until pressure was put on them by Barney Frank and his buddies to make crappy mortgages.

  • by Penny Z | 7/1/2013 12:43:40 PM

    I totally agree with Charlie G. Clinton started teh downslide in the industry by insisting everyone should own a home. I believe everyone should have a home but not all are willing or able to take care of a home. MOre damange than good was - and is - done by CRA.

    I totally disagree with bailing out underwater mortgages. Borrowers chose to put little equity into their homes, or took the equity out. There are no guarantees that anything you purchase will appreciate. Homes are about the only thing besides stocks that are even likely to appreciate. Borrowers owe the money. Why should some be given what are in effect gifts of equity when most of us work hard to buy only what we can afford and make every effort to pay back what we owe --- on time.

    Freddie & Fannie came into being for a reason - to bring liquidity to the housing market. That is still needed. With the absurd amount of unreasonable regulation, I don't anticipate enough private capital interest. Or should we just continue to sell our soul and security to the Chinese?

  • by John C Durham | 7/1/2013 6:03:24 PM

    Hmmnnn. Blame the victims. Creepy. Especially at this date with so much information out there as to the real cause of our calamity.

    Penny & Charlie's comments are a complete distortion of a very large criminal event. It is inappropriate to talk about anything except the criminal prosecution of the mbs issuing bankers Goldman, Chase, Citi, BofA, WellsFargo and MorganStanley and also of course the rating agencies who sold AAA for junk paper.

    There is no other issue involved I'm aware of. Everyone buying a home that can make payments on a legit mortgage is hardly a economic problem but is very much the opposite.

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