In response to reports of increased income at mortgage finance agencies Fannie Mae and Freddie Mac, U.S. Senator Bob Corker, R-Tenn., member of the Senate Banking, Housing, and Urban Affairs committee, today said these profits must be used to repay taxpayers and reform our housing finance system after years of government dominance.
"It's great that Fannie Mae and Freddie Mac are showing an increase in income, but we need to remember that they are making money because the Fed's relentless mortgage asset purchases, artificially high conforming loan limits, and years of uncertainty over the new rules for private label securitization have completely crowded out private capital and made Fannie or Freddie the only viable execution option for new loans," said Corker. "So while I am hopeful that taxpayers can quickly be repaid for their investment in the GSEs, any money that these government owned entities make must be allocated solely toward building a more sustainable 21st century system of housing finance that restores the private mortgage market after years of government dominance."
Fannie and Freddie were taken into government conservatorship in 2008 and have already cost taxpayers $137 billion. The entities own or guarantee roughly half of all mortgages in the U.S. at a total value of more than $5 trillion.