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.”
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
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.
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!!!
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.
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!