Brad Sherman, a Democratic representative from California, wants you to pay more for your home.
Mr Sherman today objected to the FHFA’s plan to roll back the temporary increase in the conforming loan limits put in place during the housing market crash.
“Nothing could destroy this recovery more than a double dip in home prices,” he told Edward J. DeMarco, Acting Director of the FHFA, the group that controls Fannie Mae and Freddie Mac, the government sponsored enterprises, at a hearing.
What’s neither fish nor fowl but carries a begging bowl?
Fannie Mae and Freddie Mac, of course.
The two US mortgage giants were put under government conservatorship in mid-2008 after nearly collapsing under the weight of their deteriorating loans.
And still they struggle. Today, Fannie asked the federal government for another $8.4bn in bail-out funds, following Freddie’s request for $10.6bn last week.
They have little reason not to ask. The Treasury uncapped the two agencies’ $400bn credit line last December, allowing the groups to tap as much as they need over the next three years. Thus far, the groups have been given about $148bn, so still have a long way to go before running over the previous limit.
Which begs the question: to what extent is this a “backdoor bail-out” with Fannie and Freddie able to buy bad loans off of banks’ books at taxpayer expense now that the Fed has stopped? Otherwise stated, if they don’t have to worry about running out of aid, how careful are they being about their new loans?
As it turns out, only modestly more than they were being before the collapse.