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WEST TERRE HAUTE — Democratic presidential nominee Barack Obama said Saturday that any government takeover of troubled mortgage giants Fannie Mae and Freddie Mac must put the interests of taxpayers and homeowners first. His opponent, GOP nominee John McCain, said it was essential to restructure the mortgage giants.
"Any action we take must be focused not on the whims of lobbyists and special interests worried about their bonuses and hourly fees, but on whether it will strengthen our economy and help struggling homeowners," Obama told reporters after a campaign stop in Indiana.
He stopped short of making detailed proposals, saying "we need to carefully address" the possible impact on community and regional banks. "But we must not allow government intervention to protect investors and speculators who relied on the government to reap massive profits," he said.
In Colorado, McCain said, "today we're looking at a federal bailout of our home loan agencies." His running mate, Alaska Gov. Sarah Palin, said a "McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need them." She did not elaborate.
Later, at a rally in Albuquerque, McCain added: "We need to keep people in their homes, but we can't allow this to turn into a bailout of Wall Street speculators."
In an interview for CBS "Face The Nation" to be aired Sunday, McCain said the mortgage giants need to be restructured.
"It's hard, it's tough, but it's also the classic example of why we need change in Washington," he said. "It's an example of cronyism, special interest, lobbyists, a quasi-governmental organization where the executives were making hundreds of — some billion dollars a year while things were going downhill, going to hell in a hand-basket. This is the kind of cronyism, corruption, that's made people so justifiably angry."
Obama, talking of possible changes to Freddie Mac and Fannie Mae, said: "We can't have a situation in which, during boom times, management and investors are soaking up huge profits, taking extraordinary risks, and thinking to themselves that if they get into trouble because of these risky investments that somehow the taxpayers are going to be there to bail them out."
What took place at the two institutions, he said, "was in many instances irresponsible," even if it was legal. "They were boosting profits as a priority," he said, which produced management bonuses. "I think that has led to some of the problems," he said.
Obama restated his call for a second stimulus package this year, which would involve a tax rebate for individuals and aid to states for education, health care and other costs.
Obama and McCain said Treasury Secretary Henry Paulson briefed them on the mortgage crisis and the administration's steps toward a government takeover of the two financial companies.
Paulson "did say, that when the housing market starts back up, and it will, it will in America — then the taxpayers are going to be the first to be paid off," McCain said on CBS. "They're the ones that are going to be reimbursed when the values of their homes start ... hit bottom and start back up, and they start getting more money back in."
© 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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| U.S. Rescue Seen at Hand for 2 Mortgage Giants - NYTimes.com | The New York Times | Fri Sep 5 | 2 |
| Fannie, Freddie blind to the bubble | Associated Press | Sat Sep 6 | 0 |
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{"commentId":2798685,"authorDomain":"prosperity2un2000"}
I was going to post this, but you beat me to it. Thanks a bunch! Somebody else posted this list of numbers about how Obama's plan was wrong and McSame's was right. Now, I have facts to support me.
{"commentId":2798685,"threadId":"351146","contentId":"1835725","authorDomain":"prosperity2un2000"}
#1 - Sat Sep 6, 2008 5:55 PM EDT{"commentId":2815182,"authorDomain":"lpwillham"}
The real problem with the "bailout" is that you have two companies here that control a disproportionatly large portion of a market, in this case housing.
The bigger problem to recovery is the "dumping' of foreclosure at well below what they are worth even in a depressed, market.
I am seeing property that is likely worth 100K being dumped for sales at 10-20K. The problem with this is that: 1. it is strictly cash sale which means these home are getting bought by speculators who will sit on them or 2.0slum lords who will milk them for a few years then dump them.
Neither situation serves to "fix" the housing market and get people back in. In my opinion Fannie and Freddie should be required maybe with FHA to keep thse properties on their books by offering new mortgages on them, maybe to first time home buyers or owner occupant type buyers. Banks no longer deal in 20-30K home loans. So many people who could otherwise afford a home, in alot of cases for less than what they are paying in rent, can't because small home loans arent out there.
This current "dumping" hurts home owners who didnt use their homes as an ATM.People are afraid to even buy a home for fear that a foreclosure could pop up down the street that could drag their property value down.
By stopping the dumping, making affordable loans available on the foreclosures that are sitting empty out there, we can gradually restart the housing market.
A common sense approach would do wonders here. Unfortunately we are talking about the government!
But Fannie and Freddie 'dumping inventory at 10-20 cents on the dollar does nothing but keep the market totally depressed for 5-7 more years.
{"commentId":2815182,"threadId":"351146","contentId":"1835725","authorDomain":"lpwillham"}
- 1 vote
#2 - Mon Sep 8, 2008 8:47 AM EDT{"canLink":false,"threadId":"351146","isPrivate":false}
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