The Norman Transcript

Columns

August 10, 2013

Cut loose Freddie, Fannie

NORMAN — Bipartisan plans moving through Congress to stabilize the housing market and reduce taxpayer risk in the mortgage market are a step in the right direction.

The plans would wind down the business of and eventually eliminate Fannie Mae and Freddie Mac, the quasi-government mortgage lenders that exploded in the financial crisis of 2008.

Freddie and Fannie had a great deal while it lasted. The public took the risk for private gain. As the entities owned or were behind nearly 90 percent of mortgages in the country, they melted down with the housing bubble of 2008 and had to be bailed out by taxpayers to a tune of $187 billion, the biggest of all bailouts.

The mostly privately-owned entities provided bonuses to CEOs all while the government and taxpayers were backing their bad bets. The entities have since paid back about $132 billion of taxpayer funds, but there have been universal calls to eliminate them and transition their business to other agencies.

President Barack Obama said Tuesday that he supported the bipartisan Senate plan authored by Sen. Bob Corker, R-Tenn., and Sen. Mark Warner, D-Va., that, according to Warner, would get rid of the model of “private gains and public losses.”

Their plan would phase out the agencies over five years and replace them with a new agency like the Federal Deposit Insurance Corp., the agency that insures bank deposits. The new agency would be funded by industry fees and have a much smaller role in backing mortgages. Their plan also aims to create a system of some government guarantees where the 30-year fixed rate mortgage would still be a large part of the mortgage market.

The House GOP plan also calls for closing the mortgage lenders — which are now in conservatorship — but would greatly reduce the amount of government guarantees in the mortgage market.

Text Only | Photo Reprints
Columns
  • Hero of Haarlem … for common good

    “Trudging stoutly along by the canal,” as the story goes, the 8-year-old son of a Dutch sluicer was returning home from delivering cakes to a blind man. Humming as he passed the dikes, he noticed that recent rains had made his father’s job ...

    April 22, 2014

  • Hate without end

    The news that a former grand dragon of the Ku Klux Klan is suspected of shooting and killing three people near Jewish community centers in Kansas seems at first glance like a disparaged past flaring briefly into the present. Americans like ...

    April 21, 2014

  • Don’t let moderation confuse you

    Jeb Bush’s recent compassionate comments on immigration show how far apart he is from the far right of the Republican Party....

    April 20, 2014

  • Priest’s execution should spur action

    In the hierarchy of saints, martyrs are on the highest rung of the celestial ladder, at least for me....

    April 20, 2014

  • Settlers found opportunities in red dirt fields

    There are few constants in families where the teenagers and soon-to-be teenagers outnumber their parents. One things holds true at my home: Nobody gets out of bed in the morning before dear old Dad....

    April 20, 2014

  • NRA members need to step up

    Please, Mr. Bloomberg, leave the checkbook open, but step away from the podium. Your efforts to curb gun violence and improve safety are notable. The National Rifle Association thanks you....

    April 19, 2014

  • First, do no harm — to your bank account

    After being sued by the Wall Street Journal, the government finally released its Medicare reimbursement data last week. It included the less-than-stunning revelation that 28 of the 100 doctors who received the largest payments in 2012 were ...

    April 15, 2014

  • Reading between the lines

    Reading is such an improbable idea — a miracle, really. Yet simple squiggles on a page, arranged just so, can convey ideas that change the way we think or introduce to us characters we love for a lifetime. In celebration of reading — and ...

    April 15, 2014

  • CCFI tackling area’s child abuse problem

    Editor, The Transcript: To those of you who are reading this editorial, I assume you care or at least are entertained by the opinions of others. It is my hope and desire that when you read this editorial, you will care about the facts. ...

    April 12, 2014

  • Does Oklahoma need advice from Texas?

    Does Texas have a lock on “brilliant minds”? The names of Texans like Congressman Louie Gomert, Sen. Ted Cruz and that other guy ... I can’t think of his name ... oh yeah, Rick Perry come to mind very quickly. Add to that infamous list ...

    April 12, 2014

Video
Facebook