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If the train falls off the track, Can you get your Money Back from Fannie Mae and Freddie Mac?

March 8, 2010
By barbaraqf
 
 
  Why would Investors continue to pour money into these losers? Fannie Mae and Freddie Mac, have together received more than $100 billion in emergency federal aid from the U.S. Treasury to cover their losses, plus they have more than $5 Trillion in outstanding liabilities.* Investors have been willing to lend Fannie Mae and Freddie Mac’s hundreds of billions of dollars, and buy their mortgage securities, despite overwhelming financial losses WHY??? Why would Investors continue to pour money into these losers? Because they believe the U.S. government will make them whole on any losses. Why? Because the Obama administration has gone to extraordinary lengths to assure investors around the world that they will always be paid back, offering unlimited financial assistance to Fannie and Freddie. So if this is true then why is Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee saying, “People who own Fannie and Freddie debt are not in the same legal position as those who own Treasury bonds, and I don’t want them to be.” Frank said, however, the government might decide to pay back investors 100 cents on the dollar even if it has the legal right to make them suffer losses. “The fact is they have to do some of this to avoid loss of foreign investment,” he said. “We may now decide to bail you out. . . . But that’s different from being legally obligated.” Is this about more broken promises and political double speak? Is Barney pushing our housing finance system off the track, Fannie Mae and Freddie Mac, and come on let?s be honest, will we get our money back? *Obama administration has rejected incorporating that debt onto the federal books.
Category: Blog