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.”
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.
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.
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...
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!