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Thread: Mortgage Giants Avert Potential Disaster

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    Default Mortgage Giants Avert Potential Disaster

    Mortgage Giants Avert Potential Disaster
    U.S. Agency Head Says Potential Financial Disaster Averted by Fannie Mae, Freddie Mac Regulators
    July 10, 2006 (AP)

    A potential financial disaster that could have shaken the housing market was averted because regulators discovered accounting failures at Fannie Mae and Freddie Mac, the new head of the agency that oversees the mortgage giants said Monday.

    The government-sponsored organizations appear to have gotten the message that they need to reform, but it still will take years to repair their internal problems, James B. Lockhart said in an interview with The Associated Press.

    "The housing market is so important to this country," said Lockhart, who has headed the Office of Federal Housing Enterprise Oversight for about two months. "And to have it built on what turned out to be a shaky foundation could have caused significant financial problems."

    Problems were averted, he said, because the regulators acted to identify and order corrections at Fannie Mae and Freddie Mac, which together stand behind some 40 percent of the $8 trillion U.S. home-mortgage market.

    "The good news is that it was caught in time and the remedies are starting to be in place, so that there was no major problem for the average American," Lockhart said.

    Lockhart, a friend of Bush from prep school and college, became director of an agency whose previous leader had for years waged a quixotic battle against the two politically powerful companies. After serious accounting problems at Fannie Mae and Freddie Mac became known, a push by the administration to tighten the government reins on them gained ground in Congress.

    AntiSpin: Thank God for our Great Leader! Without him, just in the past few weeks, the tunnels leading into Manhattan would have been attacked by terrorists and a disaster at Fannie and Freddie would have destroyed the US housing market! If not for our Great Leader's college chum, who caught the problems at Fannie and Freddie "in time" to prevent disaster in the "housing market" that "is so important to this country."

    As this has been going on for many years, it's hard to believe that anything has been "saved" by timing.

    Shame on AP for printing this press release.
    Last edited by FRED; 07-10-06 at 07:25 PM.
    Ed.

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