Fannie Mae Asks Taxpayers For Billions More
LYNN NEARY, host:
In this country, Fannie Mae and Freddie Mac, the huge mortgage finance agencies have asked the government for more money. The Treasury Department has been propping them up since the housing crisis a couple of years ago, but they're still struggling.
NPR's Cindy Rodriguez reports.
CINDY RODRIGUEZ: With these most recent requests, the cost of bailing out Fannie Mae and Freddie Mac has jumped to almost $145 billion. The Obama administration has committed to covering their losses.
Chris Mayer, professor of finance and economics at Columbia's business school says that's because Fannie, Freddie and the Federal Housing Administration are backing nine and 10 mortgages originating in the U.S.
Dr. CHRIS MAYER (Columbia Business School): And so any pullback in terms of government support for those organizations could have catastrophic effects on the housing market.
RODRIGUEZ: According to its first quarter report, Fannie Mae acquired nearly 62,000 homes through foreclosure. That's a substantial increase over the previous quarter. The company said the numbers would've been even higher if not for its efforts to push loan modifications. Fannie's and Freddie's troubles have provided an opportunity for Republicans long wanting to get rid of the mortgage giants.
During this past Saturday's GOP radio and Internet address, the ranking member of the Senate Banking Committee, Richard Shelby, pressured Democrats to address Fannie and Freddie's failures.
Senator RICHARD SHELBY (Republican, Alabama): Their legislation to reform the financial system touches nearly every corner of the economy. But these major contributors to the crisis are left unscathed.
RODRIGUEZ: Shelby is co-sponsoring an amendment to the Financial Reform Bill that calls for the government to stop supporting Fannie and Freddie within two years.
Cindy Rodriguez, NPR News, New York.
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