Profile picture for Mikal1

Government Plans Seizure of Fannie and Freddie

WASHINGTON — Senior officials from the Bush administration and the Federal Reserve on Friday informed top executives of Fannie Mae and Freddie Mac, the mortgage-finance giants, that the government is preparing a plan to seize the two companies and place them in a conservatorship, officials and company executives briefed on the discussions said.

 

The executives were told that under the plan, they and their boards would be replaced, and their shareholders virtually wiped out, but that the companies would be able to continue functioning with the government generally standing behind their debt, people briefed on the discussions said.

It is not possible to calculate the cost of any government bailout, but the huge potential liabilities of the companies could cost taxpayers tens of billions of dollars and make any rescue among the largest in United States history.

 

NYT

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008 - US
We think we've answered this question for you!
 
 

Replies (63)

This is a great news. The Treasury department should give Fannie/Freddie unlimited line of credit sorta home equity line of credit that needs to be paid back. Way to go Henry Paulson.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for julia111

Yikes! The shareholders are screwed, and the taxpayers are left picking up the check for this mess? The people who pulled this off should be hung from the highest tree.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008

George W. Bush recently approved the 300 billion housing bill and now Henry Paulson will push for bailout/unlimited line of credit to GSE's. That's good guys. In less than 6 months, you'll be out of the office anyways. Just do it for the American people.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008

Treasury Department can print out as much money as they want. If we ever need more money, we can just borrow from China and the Arab Countries. As soon as payback time, we can just show them the middle finger.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for CORONA NICK

Inflation here we come......

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008

Inflation rises, Rents rises. Wohoo!

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for NJsucks

nice

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for julia111

The whole thing feels so 1987 to me. The Bushys deregulate everything, steal the money, cry for a bailout, then the taxslaves are screwed again.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for CORONA NICK

Bellafonteine, and so will the number of people living in your unit....lol

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008

Hey now. The father and son team did a lot of good things. For example, they initiated war against Sadam the madman.By doing so, they made the shareholders for Hliburton instant muiltimillionaires. Let the average Joe have their fair share.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for julia111

I think you need to read a little more and learn the history of the Bush family. Anything they ever did was never good for the average Joe.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008

LOL I was just trying to pull your leg.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for julia111

oh!! I was ready to google up some good reading for you too about the Bush family!!

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for INTDESR

Will it affect housing prices?

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for klarek the realist

"Inflation rises, Rents rises. Wohoo!"

 

Not really, but whatever.

 

This isn't too surprising.  In fact it doesn't really matter.  Shadow inventory matters.  It's coming, and when it does, it will fist-f*ck the industry like nothing anybody has ever seen.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for Randy_H

Actually, this is highly likely to increase *deflationary* pressure, not inflationary.  I expect the Fed to be cutting again before the end of year.  I also expect that few of us will be cheering, but we'll all be _hoping_ that it works, because the Fed will be using their last few bullets trying to prevent a deflationary spiral.  There are lots of signs of deflation already.  It's scary.  I, for one, will readily admit that I did not see deflation as a likely outcome, but I may be proven wrong.  Sadly.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008

Randy, this one really boggles the mind. On the surface, you could say fannie and fredie will now be sellint T-bills, and that closes the spread. Mortgage rates could drop by say .5% almost instantly on that difference.

 

However, the real question, is who is going to be buying this now much larger US govt debt rollover at each auction? where is the cash going to come from, and what happens to the dollar due to this pressure? Will the figment of value that has held long term T-bill rates so low, or will that finally fade?

 

Anyways, where is Krismer to say, 'what credit crunch' as the two largest credit insitutions on the planet get bailed out?

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for julia111

You think they will lower rates again?? Damn it..

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for Randy_H

Yes, I think they will have to.  I actually think they _should_.  I know I'll be skewered for that, but I don't want another deflationary spiral depression.  At any cost, even debasing the hell out of our currency.

 

 

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008

I doubt  Ben Bernanke will lower the rates. He'll just ignore it and leave it to 2 pts. I have the feeling that the treasury department will give unlimited line of credit to Fannie/Freddie that will be paid back in time.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008

well, I would argue for other methods of fighting a deflationary spiral: a big govt spending program on energy for example, and other infrastructure projects. but I don't expect it, I expect tax rebates and rate cuts... live for today screw tomorrow seems to be the new philosophy!

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for Randy_H

Azrob, we should find some way to meet and share ales to discuss all this.  It is truly mind boggling.

 

My thoughts turn way more philosophical when you get to the "what happens next" level.  I see a very likely deflation scenario where the dollar starts strengthening to the point where we can't export anything, yet no one will sell us anything because they're all going down the tubes themselves.  That or because we set up massive trade barriers ala Smoot. 

 

My theory is that the "gold standard", as it were, is military power.  Sad, mabye.  But today, in the modern world, highly mobile, effective, credible military power is gold.  That's where the flight to safety will run.  I think it's starting to happen already, out of natural intuition.

 

Housing is the single largest factor in how an average American views their wealth disposition.  When housing prices are cut in half, that American feels half as wealthy, and demands half the prices on everything.  Coupled with stagnant wages, we have the groundwork for broad-based deflation.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for Randy_H

On that, I agree Azrob.  Entirely.  I've been saying for 10 years that we should build 2 space elevators, as well as launch a "Manhattan Project" on energy.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for kelargo

This will be the real cause for WWIII.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for klarek the realist

"who is going to be buying this now much larger US govt debt rollover at each auction?"

 

Nobody?  J/K everybody wants a deal, they'll still buy in.

 

Randy made an interesting remark.  I thought there was NO way they would not rase the fed rate, but he would know better than I would.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for TunaFish83
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008
Profile picture for Randy_H

Hint:  space elevators would unlock orbital solar power, if we chose to utilize it.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 05 2008

Deflation in the night,
what were the chances?
Prices crashing in the night,
collapsing tranches.
We were printing bucks,
but nothing worked we're through!

 

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 06 2008
Profile picture for Mr Caveat

econ 101 randy? what signs are you talking about? dollar value climbing vs other countries? i get that the value of the dollar is based mostly on dollars per sq foot and that dollars evaporating will cause deflation, but so far everything i have seen (except for housing prices) has still been inflationary...from luxury yachts to a loaf of bread, 1 dollar buys less, not more

 

although my understanding is that raising the interest rate causes deflation, lowering it causes infaltion... that said in the last year the fed has cut the rate all the way to 2%, if we are seeing deflation the fed needs a new tool box because they can only go as far as zero... or if they wanted to pay people interest to borrow money, that is sure to cause inflation, no?

 

i prefer 3% deflation to 3% inflation... at least until my first cost of living DECREASE

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 06 2008
Profile picture for space_acer

launch a "Manhattan Project" on energy."

 

BAHAHAHAHAH!  Keep dreaming...

lets cut to the chase and easily build nukes...

all the wind mills and thermo is nonsense...

Get over it and accept the only answer is getting

Nuke plants up an running... and why not?

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 06 2008
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
Related Discussions
Scams and Fraud
Profile picture for Michael Emery
Latest reply by Michael Emery
October 14 2010 | 75 answers
  • Posted by Russ Hatfield Jr.
  • In Home Buying
  • March 17 2010
section 8 people buying homes?
Profile picture for Pasadenan
Latest reply by Pasadenan
8 hours ago | 19 answers
  • Posted by Steven Pacchiano
  • In Home Buying
  • October 09 2010
How much does a Home Inspection cost?
Profile picture for Mike Opyd
Latest reply by Mike Opyd
1 day ago | 16 answers
Can the seller keep the earnest money after inspection?
Profile picture for zuser20140628062544588
Latest reply by zuser20140628062544588
3 days ago | 18 answers
4 unit Multi family house
Profile picture for moneyclip8565
Latest reply by moneyclip8565
5 days ago | 2 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.