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Fannie and Freddie, Saved But Still Loathed (By Some)

Fannie and Freddie are becoming the most unpopular couple on the Washington party circuit, at least in certain circles.

Conservatives on Capitol Hill are exceedingly irate that, in the face of a massive congressional rescue of the twin mortgage giants, Fannie Mae and Freddie Mac plan to host posh receptions at both the Democratic and Republican national conventions this summer. (Click here to read our original posting on the parties.)

Rep. Jeb Hensarling (R-Texas), chairman of the Republican Study Committee, a group of House fiscal conservatives, tells the Sleuth he certainly won't be attending the Fannie-Freddie bash at the GOP convention in Minneapolis-St. Paul.

"I guess they have reason to celebrate," he snarled in a phone interview. "They got Congress hoodwinked into guaranteeing up to $5 trillion worth of their debt." (No matter that the Congressional Budget Office estimates a less than five percent chance that the bailout will cost as much as $100 billion.)

Still, $5 trillion, which is the total value of the mortgages Fannie and Freddie hold, is the figure Hensarling is fixated on. "I've never been invited to a $5 trillion party before," he says. And given that he's been one of the more outspoken critics of Fannie and Freddie, Hensarling adds, "I don't think I'd be at the top of their [invite] list."

Actually, as it turns out, Hensarling was invited to the party. His spokesman, Brad Dayspring, says the office scheduler found the invitation in a pile of other convention-related invitations the congressman has yet to open.

Hensarling voted against the massive housing bill approved by the House Wednesday, and says he plans to introduce legislation moving Fannie Mae and Freddie Mac "toward privatization so they can't do this again."

By Mary Ann Akers  |  July 23, 2008; 6:17 PM ET
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I'd like to see a roster of Employees related to various congressman from both these felons!

Posted by: Don Newman | July 24, 2008 11:14 AM | Report abuse

Fanny Mae and Freddy Mac don't help people that really need the the help they only help the rich and they said the hell with people that can't help them self's. I am a good canadate for the help to save my home I need and grant or loan that I can afford. Right Now I pay 674.00 a month and that don't even include my taxes and insurance at 8.20% interest rate! Before I got with this morgage company I was paying 674.00 and it includes taxes and insurance! So please find some way to help me and I will feel different about these companies!

Posted by: Robert Foss | July 24, 2008 11:22 AM | Report abuse

Fannie Mae CEO Daniel Mudd's salary 13.4 million. The company lost nearly 2.1 billion. Who in there right mind gives these CEO's these salary increases.

Are they like Congress, they vote their own raises each year???

Posted by: Lloyd Shellhaammer | July 24, 2008 4:04 PM | Report abuse

The government created a dangerous moral hazard and now has to pay for it.

Posted by: PragmaticallyPolitical | July 24, 2008 5:37 PM | Report abuse

Frankly passage of this housing bail out bill in the face of explicit opposition to it by the majority of the tax paying citizens borders on treason. At the very least it is blatant taxation without representation. A lot has been said about the moral hazard in terms of socializing the risk, but a greater hazard is the huge loss of confidence in government by the American tax paying public. With approval ratings near rock bottom taking this step may have the effect of communicating to the people that honesty is punished, fiscal prudence is foolish, and cheats, scoundrels and those who spend foolishly are the favored ones by this government. I for one am disgusted by the transparency of this fraud. With members of Congress and others getting loans at better terms than the general public. Then to see those same legislators voting to bail out those lenders how can we not lose all faith in government? I guess Congress feels so far above actually representing the people that our opinions matter little these days.

Posted by: Ed Sauer | July 24, 2008 10:09 PM | Report abuse

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