Freddie Mac hemorrhaging
Today, Freddie Mac announces their first quarter numbers, reporting that with a $6.7 billion loss and requests that the Treasury Department issue a $10.6 billion bailout. The Treasury lifted the $100 billion limit on Freddie Mac last December, indicating there is room for more money to be handed out.
Between Freddie Mac and counterpart Fannie Mae, a total of $137.5 billion has already been received from the Treasury since it took over both companies in 2008.
Although recent signs point to a real estate recovery, politicians continue to appear to be indecisive about how to handle the situation ranging from more regulation to abolishing Fannie and Freddie altogether.
Sticking point for both Republicans and Democrats
New Jersey Representative Scott Garrett (R) said, “I find it mind-blowing that Democrats reject the opportunity to engage in a serious conversation about reforming the entities that are clearly the government’s biggest toxic liabilities.” Garrett continues his criticism saying, “Taxpayers are continually losing money on these failed enterprises, and at some point, we must say enough is enough.”
Massachusetts Representative Barney Frank (D) has called for a complete abolishment of Fannie Mae and Freddie Mac which of course means he would replace it with a system of his own.
ABC News reports that “thus far the administration’s only action has been the April 14 release of a series of questions for public comment on what to do with the mortgage giants.”
It is unclear what the next move is, as Timothy Geithner, Secretary of the Treasury notes that no major changes will be made in the next year.
CC Licensed image courtesy of stuartpilbrow via Flickr.com.
