“Mortgage giants Fannie Mae and Freddie Mac, which have received more bailout money than anyone else, asked for $8.5 billion more from the government this week. But changes to the government-backed institutions didn’t make it into the Senate financial regulatory bill Tuesday.
Republicans tried and failed to get an amendment that would have pulled government aid from the companies, let their charters expire and eventually transition them to the private sector.
Congress created the Federal National Mortgage Association — Fannie Mae — and the Federal Home Loan Mortgage Corp. — Freddie Mac — in order to increase the amount of money available for home loans.
The so-called government-sponsored enterprises are hybrid organizations that have to please both shareholders and Congress. They don’t make mortgages; they buy them from the banks that do, then sell bonds based on those home loans. The entities got into trouble when they jumped into the subprime mortgage market with Wall Street…
…In the meantime, the Obama administration has pledged unlimited financial support to keep the institutions going.”