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2008-07-25 Home Front Economy

Big Mac: Take taxpayers off hook for rot at Fannie, Freddie

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Posted by Nimble Spemble 2008-07-25 09:38|| || Front Page|| [1 views ] Top

#1 concur.

Posted by Broadhead6 2008-07-25 14:36|| 2008-07-25 14:36|| Front Page Top

#2 This is good election campaign fodder but it's not really correct. We as a nation decided that we wanted people to own homes rather than rent. I think that has been good for us, too, as it has helped us be a more conservative nation.

Fannie and Freddie have generally been willing to lend to slightly more questionable purchasers than completely private companies because they have operated with an implied U.S. Government promise of financial backing. They were implementing the overall consensus about homeownership as a beneficial thing, and I see nothing wrong with that.

Where it went wrong was that they followed the commercial lenders down the path of business expansion through making loans to unqualified customers. Fannie and Freddie were never as bad as some were, most of whom have gone bankrupt, but they were worse than they should have been. They'll be punished for it.

However, the loans on their books that will not eventually be made good in one way or another are a very small number. It is much less than the 2% that are claimed to be in trouble. The likelihood of the taxpayer eating the $25 billion that one reputable source said might be the worst-case scenario cost is very slim.

The situation needs some attention, granted, but it's not the major crisis it's being portrayed as. See Thomas Sowell's two articles on "Bankrupt Exploiters" that were published this week.

Posted by Jomock Platypus9662 2008-07-25 21:36|| 2008-07-25 21:36|| Front Page Top

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