The Money Pit: Mortgage Financing

Happy to note that SOME (D) folk get it, kinda.

Democratic and Republican lawmakers alike are blasting the Treasury Department’s Christmas Eve announcement that it will send unlimited tax money to failed mortgage giants Fannie Mae and Freddie Mac, thereby eliminating the current $400 billion cap on emergency aid that Treasury can give without having to come back to Congress for authorization.

Yes, the announcement was made on Christmas Eve. That's because you weren't paying attention.

There's a reason for that: the GSEs are banko. Bust. Broke. Zombies, just like Citibank.

...Questioning whether lifting the cap on assistance amounts to a “back-door TARP” – referring to the government’s Troubled Asset Relief Program bank bailout -- Kucinich called Treasury’s Dec. 24 announcement “curiously timed.”

“Many questions remain unanswered regarding this move by the Treasury,” the liberal Democrat from Ohio said. “Why suddenly remove the cap?”

Kucinich, true to form, will question the compensation granted to Fan/Fred bigwigs. But compensation is NOT the problem.

The committee will especially examine compensation and bonuses paid to Fannie Mae chief executive Michael J. Williams and Freddie Mac chief executive Charles E. Haldeman

The (R) objectors have a better rationale:

Two Republicans, Reps. Scott Garrett (R-N.J.) and Spencer Bachus (R-Ala.), are also publicly protesting the administration’s move to give the government unlimited authority to inject tax money into Fannie and Freddie.

“The Obama administration’s decision to write a blank check with taxpayer dollars for the continued bailout of Fannie Mae and Freddie Mac is appalling,”

Indeed.