Just when I'm sure most of America has the illusion that the mortgage crisis was pretty much over (after all, they stopped talking about it all the time on tv didn't they?), it turns out to be very much alive and kicking because the news now is talking about... you guessed it... another government bailout.
The feds are now making noises that they're going to takeover both the Freddie Mac and Fannie Mae lenders. A takeover that the news is saying could cost taxpayers some $25 Billion dollars (yeah, right. I am not a hamster, no government run anything ever comes in ON budget, if they predict $25 Billion, they'll probably end up spending $50 Billion.
Obama managed to make understatement an art form when he said:
"These entities are so big and they're so tied into the housing market that it is probably true that we have to take steps to make sure they don't just collapse, because the housing market, which is already weakened, would be in even worse shape if we didn't take some steps."
Well DUH! Between the two outfits is nearly HALF of the mortgages held in the US. Excuse me for being simplistic but isn't there an old saying about keeping all of your eggs in one basket? NO company should hold anywhere near the 25% or so of the mortgages that either one of these do! That needs to be spread around to keep the market from suffering if somebody goes under.
On the other hand, Republican vice presidential nominee Sarah Palin said:
"They've gotten too big and too expensive to the taxpayers. The McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help."
I only hope that they can pull it off. Some kind of change needs to be made to prevent any one company from holding more than five or ten percent of the total mortgages in the US... Preferably on the lower end of that scale. We need those eggs spread around in more baskets so that if one gets dropped, it doesn't break half of the eggs at once.