O Really? TARP has been paid back?

[Denny Crane]

http://www.reuters.com/article/2011...Type=RSS&feedName=businessNews&rpc=23&sp=true

Fannie Mae taps $7.8 billion from Treasury, loss widens

(Reuters) - Fannie Mae, the biggest source of money for U.S. home loans, on Tuesday said it needed a further $7.8 billion in federal aid to stay afloat as a shaky housing market widened its third-quarter loss to $5.1 billion.

Fannie Mae has now drawn $112.6 billion in bailout funds from the Treasury Department since being seized by the government in 2008 as mortgage losses mounted, and it has returned $17.2 billion to taxpayers in the form of dividends.

The mortgage finance company and its smaller rival Freddie Mac were taken over during the financial crisis as losses on subprime mortgages threatened insolvency.

Given the crucial role the two play in U.S. housing finance, owning or guaranteeing about half of all mortgages, the government has pledged unlimited funds to keep the firms afloat through the end of 2012. Combined, they have cost taxpayers around $169 billion.

The plan to put them into a government conservatorship was meant to be temporary, although it is likely to be years before a long-term replacement structure takes shape. Both the Obama administration and Congress want to eventually wind them down.

Their regulator estimates that the bailout could reach about $193 billion through 2014, with dividend payments taken into account.

 

[Denny Crane]

http://www.realclearpolitics.com/articles/2011/11/10/occupy_fannie_and_freddie_112015.html

Occupy Fannie and Freddie

The collapse of MF Global Holdings gives Americans yet another reason not to trust Wall Street. The firm filed for bankruptcy as federal regulators were looking for $600 million missing from customer accounts. Its CEO, former Democratic New Jersey Gov. Jon Corzine, had bet that European leaders would bail out smallish countries that were too big to fail. His bet did not pay off.

The only good news out of this story is that Washington won't be bailing out MF Global. Corzine said he won't take a reported $12 million in severance. If he truly wants to atone, then Corzine might dedicate himself to cleaning up after Occupy Wall Street activists. To use their lingo, let the 1 percent tidy up after the 99 percent.

...

Wall Street greed and hubris resulted in the $700 billion TARP bailout -- with $309 billion going to banks and financial institutions -- during the George W. Bush administration.

But the housing bubble was hatched thanks to President Clinton's well-intended plan to boost American homeownership. As Gretchen Morgenson and Joshua Rosner wrote in their book, "Reckless Endangerment," Clinton's "Partners in Homeownership wound up decimating the middle class."

Bowing to Washington, banks dropped traditional down payments and longstanding underwriting criteria. More people could afford to buy homes. Home prices rose past the point the market could bear.

The banks did not act alone. Government-sponsored entities Fannie Mae and Freddie Mac were great enablers -- the government's contribution to crony capitalism.

Banks have repaid most of the TARP bailout. As a result, the expected tab to taxpayers, according to Investors Business Daily, could be as little as $19 billion. But the Fannie and Freddie bailouts have cost U.S. taxpayers close to $170 billion.

On Wednesday, a splinter group of Occupy Wall Street began a two-week walk to Washington, D.C. If activists want to fight corrosiv