July 13th, 2008
04:14 PM ET
12 years ago

Dodd on Fannie, Freddie: They are 'sound'

Sen. Chris Dodd said it's 'not accurate' to say Fannie Mae and Freddie Mac are in trouble.

Sen. Chris Dodd said it's 'not accurate' to say Fannie Mae and Freddie Mac are in trouble.

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.”

Filed under: Chris Dodd
soundoff (67 Responses)
  1. David Newport, OR

    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?

    July 13, 2008 08:00 pm at 8:00 pm |
  2. Common Sense

    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

    July 13, 2008 08:07 pm at 8:07 pm |
  3. Marie-Gurnee, IL

    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.

    July 13, 2008 08:14 pm at 8:14 pm |
  4. Phil, FL

    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.

    July 13, 2008 08:15 pm at 8:15 pm |
  5. Bulldog


    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.

    July 13, 2008 08:15 pm at 8:15 pm |
  6. Marie Everett

    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.

    July 13, 2008 08:17 pm at 8:17 pm |
  7. Sue

    Uh oh! If Dodd is saying all is well, look out for a total bank collapse in this country.

    July 13, 2008 08:18 pm at 8:18 pm |
  8. SOS!

    Sen. Chris Dodd said it's 'not accurate' to say Fannie Mae and Freddie Mac are in trouble.

    Yea you did it !!!

    July 13, 2008 08:19 pm at 8:19 pm |
  9. James Cole

    The bottom will not occur for another two years! Take my word.

    July 13, 2008 08:22 pm at 8:22 pm |
  10. Sean from Orlando

    Then how come the Feds are going to take it over then?

    July 13, 2008 08:28 pm at 8:28 pm |
  11. Poll This!

    Their stocks are tanking, how is that sound? Oh I get it, it's more of that mental recession bull, you guys are shoveling.

    July 13, 2008 08:37 pm at 8:37 pm |
  12. strong

    Would you really expect Dodd to tell the truth?

    After all, he IS a politician.

    July 13, 2008 08:41 pm at 8:41 pm |
  13. Griff

    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...

    July 13, 2008 08:42 pm at 8:42 pm |
  14. maria

    Have you lost your mind or just suffering from dilusions like your buddy Bush, andMcCain,? Rice and Chaney are just pure evil.

    July 13, 2008 08:54 pm at 8:54 pm |
  15. A Nightingale Sings in Berkley Square

    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.

    July 13, 2008 09:01 pm at 9:01 pm |
  16. jimmy velman


    July 13, 2008 09:13 pm at 9:13 pm |
  17. Cate

    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%.

    July 13, 2008 09:14 pm at 9:14 pm |
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