Obama Says It Is Time to Wind Down Fannie and Freddie
Almost five years after taxpayers bailed out mortgage giants Fannie Mae and Freddie Mac, President Obama said on Tuesday that it’s time for private investors to take a bigger role in the mortgage market.
Fannie and Freddie collapsed in 2008 before being bailed out with almost $200 billion in taxpayer funds.
But with the nation’s real estate market on the mend, Obama said in an address in Phoenix on home ownership that it is time to wind down the two companies and make clear that the days of a guaranteed government bailout are over.
“For too long, these companies were allowed to make big profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag,” Obama said. “It was heads we win, tails you lose. And it was wrong.”
For the better part of his time in the White House, Obama has faced calls to shake up Fannie Mae and Freddie Mac, but the administration has held back on taking action while the housing market was weak.