Uncle Sam’s Inventive Way To Spend Your Tax Money Without Your Knowing It!

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All real estate investors can expect bad news regarding this 4th quarter of 2009 after Freddie and Fannie requested a $400 billion ceiling in their credit pool.

With this increase in available credit for the federal corporations, the Obama administration simply avoids the embarrassment and humiliation of addressing the failures of these institutions in public media, after all they already received more bailout money than any other corporation due to their close ties with government officials.

These two wasteful and inefficient bureaucracies are simply excellent examples of further government mismanagement of the housing market. Amid rising defaults, both made unusual disclosures recently, noting that the government’s pressure on them to assist the housing market could cost taxpayers.

Thus, increasing their lines of available credit is the best, and most secretive way, the administration and legislators can bail them out without attracting a lot more public scrutiny.

Now, don’t think that the executive pay guidelines recently installed by the new “Pay” Czar will apply to either of them, given that they received their bailout money well before the pay guidelines were put in place, and they credit increase isn’t considered a bailout.

Unlike Citigroup, Bank of America, AIG, Chrysler, and GM, Congress deemed that Fannie Mae and Freddie Mac had not received “exceptional assistance” and therefore did not have to have their pay decisions scrutinized by the pay czar.

As poorly as these two institutions have performed over the past year, the possibility of their executives receiving their $6 million pay seems ridiculous.

In 2009 the credit lines for each of them were already increased from $100 billion to over $200 billion, and now they are requesting to have that amount doubled again to total more than $800 billion, which is backed only by our governments willingness to pay the interest, with taxpayer dollars. Having received at least $100 billion in tax payer bailout moneys already, the lending giants can’t seem to find stable ground.

Usually the process goes as follows, Fannie and Freddie purchase loans from banks, alleviating the banks from any risk whatsoever, and sell them to investors, who assume all the risk for loans they know every little about. By guaranteeing or owning nearly half of all American home loans, Fannie and Freddie are positioned right in the middle of the housing market failure. That is all without including the hundreds of billions still concealed in the securitizations in their balance sheets.

With the added padding of the funny money policies of the Treasury’s newly introduced flexible financing formula, Fannie and Freddie now get more tax payer money founded on a formula which increases their assistance based on the amount of money the lose each quarter. President Obama and this bailout happy congress have continued to boast about their efforts to stabilize the national real estate market through Fannie and Freddie, even while each federal corporation is under conservatorship and has been completely ineffective at it’s mission of preserving home prices.

These efforts have come at a time when the performance of their portfolios has continued to decline and the Administration’s plans to address foreclosures have not worked.

The author enjoys writing articles about boise real estate & boise idaho real estate. To learn more about these topics click on the links above!

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MLA Style Citation:
Guest, Guest "Uncle Sam’s Inventive Way To Spend Your Tax Money Without Your Knowing It!." Uncle Sam’s Inventive Way To Spend Your Tax Money Without Your Knowing It!. 30 Jan. 2010. uberarticles.com. 8 Apr 2012 <http://uberarticles.com/news-and-society/uncle-sams-inventive-way-to-spend-your-tax-money-without-your-knowing-it/>.

APA Style Citation:
Guest, G (2010, January 30). Uncle Sam’s Inventive Way To Spend Your Tax Money Without Your Knowing It!. Retrieved April 8, 2012, from http://uberarticles.com/news-and-society/uncle-sams-inventive-way-to-spend-your-tax-money-without-your-knowing-it/

Chicago Style Citation:
Guest, Guest "Uncle Sam’s Inventive Way To Spend Your Tax Money Without Your Knowing It!" uberarticles.com. http://uberarticles.com/news-and-society/uncle-sams-inventive-way-to-spend-your-tax-money-without-your-knowing-it/

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