Fannie Mae and Freddie Mac are known to be “too big to fail”….at least that’s what the U.S had said up until the 2008 financial crisis.
In 1968 Fannie Mae and Freddie Mac had become a government-sponsored enterprise, a term insinuating that the government would always be there to bail them out if needed.
In 2008, the government was there to do just that.
With extreme lending of subprime mortgages, the economy quickly began to fail. Individuals were able to get mortgages they were unable to repay, something that would have been easily foreseeable, had the lenders set stricter requirements.
In this time, Fannie Mae and Freddie Mac had borrowed over $187 billion. And now, finally, they have repaid to the full amount and more…leaving the Trump administration to decide what to do next.
With reporting of a fourth-quarter net loss, it is obvious they have yet to recover to pre-crisis standards, and neither is it surprising that they are looking for taxpayer help with the new tax bill that has been passed by the trump administration.
This crisis begs …