Vitter: Congress Needs to Reform Mortgage Entities, End Taxpayer Bailouts

Washington, D.C. – November 15, 2011 – (RealEstateRama) — U.S. Sen. David Vitter today made the following statement after a hearing of the Senate Committee on Banking, Housing and Urban Affairs, of which he is a member, regarding oversight of the Federal Housing Finance Agency.

“It’s outrageous that Congress hasn’t passed a plan to reform the FHFA, Fannie Mae and Freddie Mac over the long term. The current conservatorship was never intended to last this long, and is now creating a tremendous amount of uncertainty in the housing market and driving up the cost to the taxpayers,” said Vitter. “The way things stand right now, taxpayers are giving open-ended bailouts to these entities – including an estimated $183 billion so far just to bail out Fannie Mae and Freddie Mac since 2008. With the recent reports of multi-million-dollar bonuses for Fannie and Freddie executives, and with their requests for billions of dollars in additional bailouts, it’s past time for Congress to act to limit taxpayers’ exposure.”

Fannie Mae and Freddie Mac played a central role in the financial crisis and, along with the Federal Housing Administration, a government mortgage insurance program, control more than 96% of the home mortgages in the United States – all ultimately backed by American taxpayers.

Vitter last month introduced, and the Senate voted on, an amendment that would have capped American taxpayers’ overall exposure for losses by Fannie Mae and Freddie Mac at $200 billion. Vitter’s legislation would have protected taxpayers, but would also have made it much less likely that the Federal Housing Finance Agency would have approved of the $12.79 million in bonuses recently awarded to 10 Fannie Mae and Freddie Mac executives, as there would have been a limited amount of taxpayer funds available to the two companies.