The Root Cause Of Economic Collapse Was Fannie Mae / Freddie Mac

The socialist Democrat solution to the economic collapse was the Financial Reform Bill.  The bill gives the government more control of banks and costs American taxpayers’ money without addressing the economic collapse or preventing another collapse.

The Financial Reform Act in many ways is flawed.  One of the biggest flaws is the Financial Reform Bill does nothing about a major root cause of the economic collapse, namely Fannie Mae / Freddie Mac.  SpeakNowAmerica has had several articles on Fannie Mae / Freddie Mac for the past two years. 

Many Democrats including Barack Hussein Obama have protected Fannie Mae / Freddie Mac since before the economic collapse.  George Bush on two occasions told Congress that Fannie / Freddie were a problem and needed to be looked at.  Barney Frank just two months before the collapse on the House floor said Fannie / Freddie didn’t have any problems.

About 18.9 million homes in the U.S. stood empty during the second quarter as surging foreclosures helped push ownership to the lowest level in a decade.  The ownership rate, meaning households that own their own residence, was 66.9 percent, the lowest since 1999.

A record 269,962 U.S. homes were seized in the second quarter, according to RealtyTrac Inc. Foreclosures probably will top 1 million this year, the Irvine, California- based data company said in a July 15 report.  “There are a lot of people losing their homes and either moving in with family or renting places to live,” said Patrick Newport, an economist with IHS Global Insight in Lexington, Massachusetts. “Foreclosures are still going up.”

Jeffrey Goldstein, the Treasury’s undersecretary for domestic finance, said Fannie Mae and Freddie Mac have been “tightly supervised and regulated” since they went into government conservatorship two years ago. The two mortgage-finance companies have made “significant progress in improving the credit quality” of their new obligations, Goldstein said.

“For decades, Fannie Mae and Freddie Mac privatized their profits while ultimately putting taxpayers at risk for losses,” Goldstein said. “This type of ‘heads private shareholders win, tails taxpayers lose’ system of misaligned incentives makes no sense for the nation.”

Fannie Mae / Freddie Mac needs to be regulated.  Along with the socialist Democrats they are the main cause of the housing collapse.  They have Americans on the hook for trillions of dollars.  The Democrats did nothing to fix them in the Financial Reform Bill. 

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