Understandably buried beneath the news of last Tuesday'sRepublican onslaught in the House and to a lesser degree the Senate came thelatest earnings release from mortgage concern Freddie Mac.
Freddie, which has reliably spilled red ink in 11 of itslast 12 quarters, fared little better in its 13th reporting period,hemorrhaging another $2.5 billion, while at the same time petitioning thefederal government for an infusion of $100 million.
For those keeping score at home, that catapults thegovernment's (read: taxpayers) rescue tab for the troubled concern to just over$63 billion.
Together with the larger Fannie Mae, taxpayers are leftholding a $135 billion tab since the two entities were taken over thegovernment and placed into conservatorship.
Want more good news? The Federal Housing Finance Agency,the oversight body to both Fannie and Freddie, estimated that the bar tab tokeep these hulks afloat could surpass $150 billion. Should home prices fall bymore than 20 percent, the taxpayer cost could be $100 billion beyond thatthrough 2013.
I'll repeat that for emphasis - the taxpayers could be onthe hook for roughly a quarter-trillion dollars. Yes, that's with a"T."
You probably won't get an argument from Freddie Mac'schief executive Charles E. Haldeman Jr., who said that it would be a"considerable time until the housing market has a sustainedrecovery."
With the GOP seizing control of the House, thechairmanship of the House Financial Services committee will mercifully transferfrom longtime Fannie-Freddie cheerleader Barney Frank to Spencer Bachus ofAlabama.
Bachus will be in a position to determine the future ofthese exhausting entities and apparently favors a free-market approach thatwould eradicate continued government support of the mortgage financingconcerns, which currently own or insure about half the mortgage market.
The day after the massacre, which exceeded the GOP sweepsof 1946 and 1994, Rep. John Boehner of Ohio, the Speaker of the House comeJanuary, said "We're humbled by the trust that the American people haveplaced in us," he said. "Our job is to listen to the American peopleand follow the will of the American people."
May I respectfully suggest that whatever divides are sureto follow on both sides of the aisle over the coming years euthanizing or atleast phasing out Fannie and Freddie would result in precious few partisandebates about affordable mortgages and in effect rising taxpayer debt.
Somehow, costs are always easier to judge thanprinciples.
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