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Housing bill to include possible rescue of mortgage giants
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More from BusinessWASHINGTON — A federal rescue of Fannie Mae and Freddie Mac could cost taxpayers $25 billion, congressional budget experts said Tuesday, as lawmakers put finishing touches on legislation that would tap the troubled mortgage giants' profits to help save homeowners from foreclosure.
A costly rescue is just a worry, not a fact at this point. Peter R. Orszag, director of the Congressional Budget Office, predicted in a letter to lawmakers that there's a better than even chance the government will not have to step in to prop up the companies by lending them money or buying stock.
But Congress is expected to vote as early as today on a housing measure that would give the Treasury Department authority to throw Fannie and Freddie a temporary lifeline.
It's part of a plan to let hundreds of thousands of strapped homeowners refinance into more affordable, government-backed loans at fixed rates rather than lose their homes. Defying President Bush, the bill would send $4 billion to neighborhoods hit hardest by the housing crisis — something that has prompted the White House to threaten a veto.
Taking advantage of the momentum behind the election-year housing package at a time when economic woes top voters' concerns, Democratic leaders planned to include a separate measure to increase the statutory limit on the national debt by $800 billion, to $10.6 trillion.
The housing bill also would create a new regulator and tighter controls on Fannie Mae and Freddie Mac, the government-sponsored companies that own or guarantee $5 trillion in U.S. mortgages — almost half the nation's total.
And it would create a new affordable-housing fund, which would be drawn from the firms' profits and cover any losses from the foreclosure rescue plan.
Posted by guy133 on July 23, 2008 at 8:58 a.m. (Suggest removal)
no no no no no no no.
Posted by beachmom on July 23, 2008 at 11:09 a.m. (Suggest removal)
So hundreds of thousands of homeowners who signed up for loans that they could not afford are getting bailed out (by taxpayers), and "troubled mortgage giants" who made these bad loans are also getting bailed out (by taxpayers). Those of us who had a brain and did not take on stupid financial gambles are going to be bailing everyone out.
This is so wrong.
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