On the second anniversary of the bailouts of Fannie Mae and Freddie Mac, it’s now obvious that weak lending standards, serving the political interest of affordable housing for all, were the main reason for the nation’s mortgage meltdown.
Edward Pinto, resident fellow at the American Enterprise Institute, says the Federal Housing Authority's fiscal condition continues to deteriorate and it needs to bring a credible plan to Congress on how to deal with its insolvency. Pinto talks with Bloomberg's Kathleen Hays and Vonnie Quinn on Bloomberg Radio's "The Hays Advantage."
In Honolulu, on the southern coast of the island of Oahu, there’s a four-bedroom home priced at $785,000 that has views of the sun setting over the Pacific Ocean. The beaches of Waikiki are 15 minutes away.
If you and I were in a bar together, and you suffered a nasty bump on your head when I accidentally whacked you with a pool cue, there probably would be no disputing that my action caused your harm. But for my careless swing of the stick, the injury wouldn’t have happened.
The cost of fixing Fannie Mae and Freddie Mac , the mortgage companies that last year bought or guaranteed three-quarters of all U.S. home loans, will be at least $160 billion and could grow to as much as $1 trillion after the biggest bailout in American history.
The Federal Housing Administration may end the fiscal year with about $3 billion in reserves after premium increases and rising loan volume offset a previously forecast shortfall, people with knowledge of the numbers said.