Housing News

More Trouble at Freddie Mac

Freddie MacCorporate confidence is down this quarter

It seems the feisty online comments on Freddie Mac’s latest news don’t seem to come as a surprise anymore. After reporting a staggering second quarter loss of $821 million last Wednesday, Americans who bluntly profess their views, political or otherwise, have flooded websites with words of dismay and grunt. The Huffington Post lists reactions bombarding Bush’s financial management, the use of taxpayers’ money for irresponsible homeowners over their mortgages and even the tony lifestyles of its managers who dared to receive millions of annual net pays amidst the company’s imminent financial plunge. The Wall Street Journal’s Market Watch comments didn’t also spare the country’s second biggest buyer of mortgages calling its officials as liars, crooks, and poor predictors.

Part of Bush’s last stance before he steps out of the office on January is to at least provide some remedial measures on the housing slump that has brought much debate among economists, investors and millions of Americans who are baffled whether we are now in a recession or getting nearer to one. House Bill 3221 which was signed to bail out both Freddie Mac and Fannie Mae would still have to take some more time to produce such outcome.

Indeed, taxpayers are on the hook and with such provision, questions on just how sensible it is for the government to tolerate irresponsibility to those who deliberately amassed mortgages with such high risk of defaulting is put to raise. And it’s not just the assistance that’s being questioned. Now, it’s Freddie Mac’s capitalization that’s on the line, raising such fears that if the Securities and Exchange Commission would raise its requirements, it would continually suffer in excesses. Still, we hear that the BODs are still in much control of their dire situation.

Taxpayers expect nothing less but a fair return of their dues; one is to find a balance of government control on public companies that is supposed to perform better than privately held ones. Most sensible comment on these news sites may or may not make a point for some but certainly have been written to express infuriation and unconscionable sentiments palpably.

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