Over the past decade, Fannie Mae and Freddie Mac transformed themselves into some of the worst-run companies in recent history. But contrary to current talking points, the firms' failings had almost nothing to do with their programs for low-income borrowers. As policymakers debate what should be done with the mortgage giants, a battle is now beginning in which the very availability of affordable housing for the middle class may be at stake.
by Zach Carter, Media Consortium MediaWire Blogger
"I'm not talking about a budget deficit. I'm not talking about a trade deficit. I'm not talking about a deficit of good ideas or new plans. I'm talking about a moral deficit . . . . We have a deficit when CEOs are making more in ten minutes than some workers make in ten months; when families lose their homes so that lenders make a profit; when mothers can't afford a doctor when their children get sick."
ABC News is reporting this morning the Rahm Emanuel was on the board of directors at Freddie Mac, implying that he was part of the lack of oversight that led to the mortgage meltdown.
To clarify, from research I did while I was at the Isthmus in Madison Wisconsin, covering Community Block Development Grant Committee proceedings, Fredie Mac did not begin to insure the problemitized home loans until 2004 and 2005. The push for these loan products came in the wake of 9/11, after Greenspan propped up the nations' economy on the housing market. Emanuel served on Fredie Mac's board for a year, beginning in 2001.
Sarah Palin apparently has a limited understanding of the troubled mortgage finance industry, as she told voters in Colorado Springs (9/6) that lending giants Fannie Mae and Freddie Mac had "gotten too big and too expensive to the taxpayers." She promised that "The McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help." Perhaps Gov. Palin may be forgiven for her shallow knowledge of the secondary mortgage market. Andrew Leonard of Salon.com noted (9/8) that Fannie and Freddie have been private entities and haven't cost the taxpayer a dime-so far. Ironically, the lack of regulation of mortgage bankers brought on the abuses that forced the government takeover. But taxpayers likely will end up picking up a substantial tab.
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