Friday, September 26, 2008
Obama on Freddie-Fannie:Must Protect Homeowner Not Lobbyists
Barack Obama holds a press conference to address the potential government takeover of Freddie Mac & Fannie Mae mortgage companies laying out three benchmarks the government intervention must meet.
"First, any action we take has to be focused not on the whims of lobbyists and special interests worried about their bonuses or hourly fees but, whether it will strengthen the economy, help stablize the housing market, and whether it will help struggling homeowners who are also being hit by lost jobs, stagnant wages," Obama stated.
According to WSJ, the intervention would be the most significant takeover since the housing crisis began.
"Any move by Treasury would represent perhaps the most significant intervention by the government in the financial industry since the housing bust touched off turmoil in the credit markets a little more than a year ago. From the $168 billion economic-stimulus package in February through the bailout of investment bank Bear Stearns Cos., the Bush administration and the Federal Reserve have taken an increasingly aggressive stance in responding to what has become one of the worst financial crises in decades.
Fannie and Freddie are vital cogs in the U.S. housing market. Their troubles have threatened to worsen the bursting of the housing bubble, which has led to a surge in foreclosures.
A Treasury intervention could help Main Street borrowers by keeping interest rates on mortgages lower than they would be in the event of continued instability."