The Obama - Clinton Disaster Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : The Obama - Clinton Disaster

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: clutterer who wrote (4598)	1/8/2009 10:48:15 PM
From: DuckTapeSunroof	Read Replies (2) of 103300

Paulson Sees Changes for Freddie and Fannie January 8, 2009 By THE ASSOCIATED PRESS nytimes.com WASHINGTON (AP) — Treasury Secretary Henry M. Paulson Jr. said on Wednesday that allowing the mortgage finance giants Fannie Mae and Freddie Mac to return to their old operating ways was not an option. Congress and the next administration must decide the proper role government should play in supporting home ownership in light of the severe economic costs imposed by the bursting of the housing bubble, Mr. Paulson said. The government took control of Fannie and Freddie in September, placing them in conservatorship. Mr. Paulson offered thoughts on a variety of possible solutions that could follow that move, but did not endorse any. One option would be to remove all direct and indirect government support and privatize the companies by breaking them up and selling them. Drawbacks to that approach included most likely a low rate of return to potential investors, Mr. Paulson said in a speech to the Economic Club of Washington. “I am skeptical that a ‘break it up and privatize it’ option will prove to be a robust or even viable model of any substantial scale without some sort of government support or protection,” he said. Mr. Paulson also raised the possibility of creating a public utility type of company that would guarantee mortgage credit. Under that plan, Congress would replace Fannie and Freddie with one or two private sector entities that would buy and securitize mortgages with a credit guarantee backed by the federal government. The new companies would be privately owned but governed by a commission that would set a target range for a rate of return, he said. Such a proposal would address the inherent conflicts between private ownership and public purpose that must be resolved to avoid the potential for another crisis in mortgage financing, Mr. Paulson said. He said officials had a responsibility to begin work on a long-term structure that avoided the dangerous mix of policy and market distortions created by the flawed government-sponsored enterprise model. Fannie Mae and Freddie Mac own or guarantee about half of the $10.6 trillion in outstanding home loan debt. Copyright 2009 The New York Times Company

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next