IBD:
The price tag for bailing out Fannie and Freddie keeps rising. The latest figure nearly doubles earlier projections, making Washington's role in home finance even harder to defend.
The federally controlled mortgage giants will now need as much as $215 billion more from taxpayers in the next three years to stay solvent. That's on top of the $148 billion Treasury already has injected into Fannie and Freddie.
The Obama administration says the new infusion of cash should cover their losses. But it assumes housing prices will bounce back soon, even though private forecasters don't see a recovery for years.
With a key election approaching, and voters fed up with government bailouts and open-ended spending, the administration seems to be putting a happy face on an open-ended bailout.
Early on, it pledged $400 billion to keep Fannie and Freddie afloat — twice the $200 billion President Bush pledged after seizing the toxic twins. Then late last year it quietly pledged unlimited support.
Some estimates put the final price tag as high as $1 trillion.
Fannie and Freddie aren't just a major liability for taxpayers; they're a major political liability for Democrats. Fannie and Freddie are the chief cause of the financial crisis, and Democrats are the chief reason for that.
They pushed them to underwrite $1.8 trillion in subprime and other risky loans to help close the "mortgage gap" between minorities and whites.
Despite all the talk of reforming Fannie and Freddie, Democrats gave them a pass in the "most sweeping financial regulatory reforms since the Great Depression." In another punt, the administration says it'll address the issue in a report to Congress this January.
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Postponing foreclosures is only going to make matters worse and last longer. We need to find a way to liquidate
non performing loans and put those houses in the hands of people who can pay if the housing market to to make a recovery in those areas of the country the Democrats have put underwater. We also need to reform the housing lending policies that led to the bubble. That is something the Democrats have avoided since they took over everything in 2008.
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