WASHINGTON (CNN) - Things got heated Sunday morning on CNN’s Late Edition over the question of whether taxpayers have to bail out the government-sponsored mortgage lenders Fannie Mae and Freddie Mac.
“If they're in deep trouble, [should] U.S. taxpayers go out and bail them out?” host Wolf Blitzer asked Senator Jon Kyl, R-Arizona, a member of the Senate Finance Committee who was on the program with Senate Banking Committee Chairman Chris Dodd, D-Connecticut. Dodd jumped in to respond himself.
“To suggest somehow that [Fannie Mae and Freddie Mac] are in trouble is simply not accurate,” Dodd replied.
Last week shares of the two mortgage giants plummeted as speculators grew increasingly nervous that Fannie and Freddie would not be able to guarantee the $5 trillion debt they hold in mortgages. Dodd’S committee oversees Fannie Mae and Freddie Mac.
“The facts are that Fannie and Freddie are in sound situations,” Dodd said. “They have more that adequate capital, in fact more than the law requires.”
When pressed about the recent IndyMac Bank federal takeover, Dodd said that could have been avoided if there had been proper regulations in place to monitor the sub-prime mortgage market.
IndyMac closed on Friday after federal regulators realized that the bank was no longer capable of guaranteeing deposits. The bank was also a large issuer of sub-prime mortgages.
Kyl said Americans should not fear the money they have in banks is at risk. But he added that the Fannie Mae and Freddie Mac situation is “of serious concern… They really are barely staying above water.”
From CNN Politics
© 2011 Cable News Network. Turner Broadcasting System, Inc. All Rights Reserved.
| Advertising practices | Advertise with us | About us | Contact us | Work for us | Help
What Senator Dodd is saying is true. I heard the same thing on a Friday Night News Hour, by two analyst and the said Fannie and Freddie are fine. The republicans are just trying to scare the public again.
I favor Obama in the election, but I tow no party lines. Dodd is LYING. Fannie and Freddie OWE more than they OWN. Plain and Simple. Anyone who can read a balance sheet and a financial statement knows this. This is now a game of confidence and Dodd (and most politicians) want us to remain confident out of fear of the alternative.
IndyMac was a spinoff of Countrywide and did Alt-A loans which are not subprime. Subprime is poor credit. Alt-A had good credit that's how they could get a loan without documentation.
These lies (or at best simplifications) are not doing the American people any favors.
He should be kicked out of the senate. I am losing my home because Country Wide won't lower my 10.25% mortgage but they will give the good senator a special deal so he can influence polisy on their behalf. Good job, Senator.
DEBATE! Find Obama and bring him to the table!
Sen. Chris Dodd said it's 'not accurate' to say Fannie Mae and Freddie Mac are in trouble. A funny SMELL!!!
I agree with you AdamW. I really hope Obama WILL NOT pick him as VP
Obama/HRC 08,12
So I guess Phil Gramm was right? USA is in a mental recession and americans are a nation of whiners?
well lets start. Government will do whatever they want with American tax money because were are not seen in their eyes anymore. American people are screwewd by politics and mortgage companies now they want to screw us more by using our own tax money to bail the mortgage companies out. this is really funny. People we are screwed and surrounded by crooks in washington. we need to refresh this country by riots and try to stop all this washington evils. WE DONT WANT OUR GOVERNMENT TO BAIL MORTGAGE COMPANIES OUT WITH OUR TAX DOLLARS!!!!!!!!!!!!!!!!!!!!!!!!!!
when president obama takes the reins from bushcain,he will unite the country in solving our financial problems and together,we'll become an even greater nation.sorry,if i sound 'whiney'.
If it's true that "They have more than adequate capital, in fact more than the law requires.” someone needs to rein in these speculators. They appear to be doing more harm than good.
DEMOCRATS UNITE!!!
Sen. Chris Dodd said it's 'not accurate' to say Fannie Mae and Freddie Mac are in trouble............YES IT IS.....SMELL LIKE TROUBLE!
CNN......WHY EVERY TIME .....Your comment is awaiting moderation
Dodd will take care of fannie and freddie
after all he got a sweetheart deal from them didnt he
Are you on drugs? You are losing your home because you cant afford the home and morgage you signed up for. You signed for a 10.25% morgage from the get go.
there are all the democrats Dodd ; and obama got deals
now its time for pay back
I have no faith in Dodd. I agree with AdamW. He should be kicked out of the senate.
Yeah Right ! I had a loan with Fannie May before the Credit Crises .They sucked back then too.
NOW THIS ...blank......DODD-Y WOULD BE A GOOD VP CHOICE FOR OBAMA-DOODDL
HAVING FUN ALL THE WAY====?
Dodd’S committee, the ones chartered to oversee Fannie Mae and Freddie Mac has failed us. The OTS has failed us with IndyMac and Countrywide. The past Chairman of the Fed Reserve, Alan Greenspan failed us. For any of them to say they did not see this all coming four to five years ago is a lie. It is a flat out lie. Furthermore, for none of these individuals or organizations to change one thing in regards to mortgage lending in the past five years is beyond belief.
Don't blame Senator Dodd for actions of past Congresses, in particular those between 1996 (when the Republicans took control by lying to American voters) and 2006, when American voters finally wised up and put Democrats back in charge. The Republican Party brags about loosening governmental reins so that the business world can operate whthout government oversight. This is just one example.
Freddie Mac, Fannie Mae, and IndyMac bank could have been regulated if the Republicans weren't so interested in allowing businesses to freedom to screw everyday Americans. Why have a government if they aren't governing? This should be the lesson to us all!
McSame, we are not whiners and our financial pain in not in our heads. Your top economic advisor hasn't got as clue and since you said that you don't understand the economy, neither do you!!!
AdamW
You're loosing your home because you let yourself get put in a position where you could not afford the payments, and you're saying that someone should be kicked out of the senate because you either speculated and lost, or simply couldn't read the fine print on your loan? That's sad. Take responsibility for your own actions.
Adam,
Many of us share your paine and it is not only in our heads!
CNN, i watched the interview and your headline is deceptive. This is not what he implied. Please review this and repost correctly
Dodd made a very valid point during the interview. Most of today's lending issues are due to the Bush administration gutting the regulatory offices so the big banks could make more loans by any means available. Some rules were suggested by McCain co-chair Gramm while on the payroll of UBS as a lobbyist.
Also, the individual needs to take responsiblity for making a bad decision. Yes, there are predatory lenders, this is a capitalistic system. Do you walk into a car dealership and expect the salesman to protect YOUR best interest? If so, you need to bone up on the principal of capitalism. So, yes there are lenders that will fleece you of every dime you have. It is your repsonsiblity as an adult to educate yourself, so you will know when you have encountered one!
Senators Dodd and Gramm need to stop taking a "hear no evil, see no evil" approach to the economy. People are losing their homes out here, and our so-called leaders don't seem to care because it's not happening to them.
I'm not a Dodd fan but I don't see how he should lose his job because the bank bought you a house and you couldn't repay them.
AdamW,
Sorry to hear about you losing your home. These so-called leaders of the Democratic Party have turned out to be real disappointments, haven't they? We need real leaders to represent our interests as constituents who need someone competent to fight for the issues that the leaders of the Democratic Party claim to be standing up for.
Knoxville NFIL
Chris Dud!
EVERYONE PLEASE READ
McCain policy is the same as BUSH
Look gas up war and i have no money and .........
OBAMA policy is the same as BILL CLINTON
You had more money in your pocket life was better
Gas price will not come down if McCain President they belive he is like BUSY so they will not talk to him.
OBAMA gas price will drop they said they will talk with OBAMA.
If you don't like OBAMA and you are smart vote for his policy not him if don't like him.
Vote for McCain if you like BUSH policy.
Also Obama will not tax you and give you a tax break if you make less than 250,000 the same policy BILL CLINTON had when you had money in you pocket.
McCain keeping BUSH policy.
i need money for college
WHAT ROLE PLAYS NORTHERN TRUST BANK IN ILLINOIS WITH HIGHLY FAVORABLE HOMES LOANS SCANDALS?****
LOL. I cannot believe the crooks over at Indy and Countrywide. It's been known for years and no one has done anything about this.
Before the sub-prime loss it was the HELOC's with CW. It will always be something. Expect B of A to have problems.
Dodd is corrupt. He's in bed with Fred and Fannie. He needs to go to jail.
They may be compliant with the law.... but it's a law he wrote and watered down their reserve requirements so badly that they are essentially insolvent. And HE reduced the ability of the regulatory body to oversee them and do something about it.
If they go under, it will make the savings and loan crisis of the early 90s look like a bake sale. And Congress is squarely to blame.
It is my opinion that Chris Dodd is a born leader and should be vice president. I liked the way he chastized Wolf Blitzer this morning. Chris Dodd knows what he's talking about and Blitzer keeps stirring the pot no matter what it might do to our country and our economy.
Chris for Chris
You know – why don't you all get these thugs out of Congress. We need term limits and the citizens should start demanding it. I'm waiting to vote out Kerry and Kennedy will be next. We even have as our governor, Deval Patrick, the "just words" guy that BO lifted parts of his speech. All hot air, no action – he spends more time trying to get casinos in here and wanting to give breaks to illegal immigrants than having a real plan to run the Commonwealth. Wake up because you get what you deserve!!!!!
...and he wants to be VP! My GOD! Only a pompous idiot would think we'd buy that load of manure. What is wrong with the Democratic party?
With all due respect you are going to lose your home because you cannot afford it. The government shouldn't have to bail you out.
It's ALWAYS the overseer of a failed outfit that makes stupid claims that all ok...as the water gets higher and higher!
I don't like how how these two sound!
Adam it's not Countrywide's problem to lower your mortgage, if your credit is good, you should be able to refinance, if not then you got yourself into the mess your in, no one else is to blame...
I am quite happy with my 4.875% mortgage from you guessed it, Countrywide...
Adam it's not Countrywide's problem to lower your mortgage, if your credit is good, you should be able to refinance, if not then you got yourself into the mess your in, no one else is to blame...
I am quite happy with my 4.875% mortgage from you guessed it, Countrywide...
Whether Freddie and Fannie are sound remains to be seen. The question is have they been regulated by the Federal Government, and if not, their problems are their own. For Bush to put a "Band-Aid" on Freddie and Fannie doesn't mean much if they don't behave.
Instead of blaming the government – you should be looking yourself in the mirror. You obviously signed up for a variable rate mortgage or one with an artificially low introductory rate. To blame the government for their failure to babysit you is typical of Americans today – not taking responsibility for their own actions – fiscally and otherwise
Sen. Dodd got special mortgages from Country-wide. He himself is a fraud and how can he speak about tax-payer's money. All these democrats have no economic sense. They should be rejected by the public in the coming election.
If you do the risk analysis using stable fat-tailed distributions instead of normal distributions you will find that both Fannie and Freddie are woefully undercapitalized on both a risk exposure basis and on total capital basis. With all due respect, Dodd, Paulsen, and Bernanke would love to be able to talk away the crisis but in fact it isn't even half over. If default rates on Alt-A and conforming loans remain at current levels or higher for the next 2 years, then there is a capital problem for both of these institutions. Let's deal with it now when the fallout will be less onerous rather than later. Given that Fannie and Freddie are currently issuing 80% of the new mortgages we cannot afford to have this uncertainty persist.
Once again that word appears in the economic woes of our nation. Speculators, it truely is a shame that we have created a subculture on Wall Street that have no real marletable skills, are incapable of producing anything of material value, but still manage to rape billions from the economy by doing nothing more than preying on the fears and weaknesses of others. Some call these individuals finacial geniouses, othe such as myself call them carnies, scam artists, brokers of fraud and deciet. Just think an entire group that make their money by spreading rumors and gossip hoping that they first can drive the prices up so that they can unload what they have no use for, and then drive the prices down so they can buy up what they have convinced others is overpriced and a dangerous unstable commodity, just so they can buy it up and then start the cycle all over again. Those that listen to speculators and sell during economic turndowns desire to lose their greedy shirts and most will do just that at the espense of our national economic well being.
Senator Dodd, like so many others in this democratic congress, has an unbelievable ignorance of economics. On the afternoon that he said they were "sound", the government (ie. you and I) announces a bailout.
Senator Dodd and his like should resign, citing incompetance as the primary reason. If he was in the private sector, he would unemployed come Monday morning.
Yeah – "Good Job, Brownie"
and "The economy is strong"
and "Send us your finest ..................
It's about time people started taking responsibility for their own actions, AdamW. You signed a mortgage for 10.25%. No one held a gun to your head and forced you to accept those terms. You made decision for yourself. Accept it and stop whining!
if it is so f+++ing sound, why are we bailing them out? Stop the rhetoric. Tell us the truth, do Americans have a future or has our fears come true, that the policies of greed has destroyed a superpower?
To say that there is no mortgage problem and everything is just fine, is like saying the War in Iraq is going smoothly and we should just go about our days without a worry in the world...
oh yes, Chris Dodd is a moron
The government is lying. 15 years and 127 Federal bank takeovers later and the banking system is sound??? If you believe that, there is a bridge that Dubai would like to sell you.
Our government knows 90 other banks that are in trouble, but we can't be told.
Why is our government preventing us from protecting ourselves? Out government is controlled by banks and all other corporations, not us.
It's time to get rid of all the incumbents – vote the rascals out – we should be warned !!!!!!!!!
They vote themselves BIG raises, and let us lose our money for their lobbyists.
AdamW,
If you have a 10.25 interest rate you brought that on yourself. While you may want the government to help you out you have to take responsiblity for your own dumb decisions. I'm quite sure Senator Dodd's credit rating is MUCH better than yours.
Shumer is just a loud mouth. How did he ever get that position in NY? He can't possibly represent the intelligent people of that state. Go ahead, loudmouth Shumer, and write all the banks in the country telling them to straighten up or he will come in and fix them like he did this one.
Uh oh! If Dodd is saying all is well, look out for a total bank collapse in this country.
Sen. Chris Dodd said it's 'not accurate' to say Fannie Mae and Freddie Mac are in trouble.
Yea you did it !!!
The bottom will not occur for another two years! Take my word.
Then how come the Feds are going to take it over then?
Their stocks are tanking, how is that sound? Oh I get it, it's more of that mental recession bull, you guys are shoveling.
Would you really expect Dodd to tell the truth?
After all, he IS a politician.
You can't prove the are sound.. But they just better be more honest as time goes bye... Faulter, and the public crasp it... They won't trust you again.... Good Will! Is the best policy.... Fail, and your credability goes with it Mr.... The 'Word', is truth until it become a Lie...
Have you lost your mind or just suffering from dilusions like your buddy Bush, andMcCain,? Rice and Chaney are just pure evil.
If you believe Dodd and Schumer and Obama, you should be committed to the nearest asylum. They just don't make any sense any more. Our economy is in shambles and the do nothing congress continues to do nothing. Seems to me that they should start by being real men and issue a new speed limit of 55 mph in the east and mid west and 65 in the 15 western states.
Second they should vote to drill in ANWR and other areas as soon as possible. Next they should bill Iraq for some of the cost of doing their freedom for them. Don't they know freedom is not free?
Senator Schumer, Dodd and Obama: my question is "who is too blame?" Seems that no one wants to take credit for this problem. I am not a whiner, but a pragmatic person. Someone should step forward. Someone should take the blame. Who was asleep at the switch?
Isn't Obama a piece of work? He only wants to go to Germany to copy JFK. What an idiot? Does he think he is JFK? I've got news, I knew JFK, JFK was a friend of mine and Obama is no JFK. Sooo quit being Hollywood Hussein.
Vote for McCain, a man who appreciates and will protect our values.
SEN. DODD'S REMARKS DO NOT HOLD WATER WITH THE AMERICAN PEOPLE WHO HAVE LOST THEIR HOMES AND NOW THEIR LIFE SAVINGS.
Let me get this straight, the Treasury and the Federal Reserve have just announced that they are going to prop up Fannie Mae and Freddie Mac with whatever funds they need to stay solvent but Dodd wants us to believe they are "sound". How did he say that without bursting in to laughter? The Democrats are liars of a Republican caliber. No wonder Congress' approval ratings are 9%.