Fannie & Freddie-Taxpayers to bailout Housing Industry

The two government-sponsored entities, Fannie Mae & Freddie Mac, are now forcing taxpayers to take more risk in real estate. Now you don't even have to be shopping for a home to take that risk. You just have to be a taxpayer. Fannie and Freddie currently guarantee $5 trillion-worth of mortgages. New guidelines allow them to add $2 trillion more.Other sources have put Fannie & Freddie's holdings even higher--to as high as $6 trillion, or even $7 trillion.If their holdings were $6 trillion, and home prices declined -30%, the value of their collateral would also decline by 30%, or by -$1.8 trillion. If Fannie & Freddie's "implicit" government backing became "explicit" (which is likely), taxpayers would be on the hook for that -$1.8 trillion.If you add this to the $400 billion the Fed has already given away to Wall Street speculators and loan sharks, taxpayers would be on the hook for over $2 trillion.Meanwhile, the Right-Wing Corporatists whine about the cost of "entitlements" and bemoan welfare. Classic "welfare," or Temporary Aid to Needy Families (TANF), costs only $20-25 billion per year. That's a fraction of the current Corporate Welfare giveaways by the Bush-Bernanke-Paulson "economic axis-of-evil."http://www.unlawflcombatnt.proboards84.com/

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