A solution to the mortgage mess

Posted: Friday, October 29, 2010

A Thursday, Oct. 21 news story indicates that the Fannie Mae and Freddie Mac "bail out," instead of being $120 billion dollars, is now expected to be $259 billion dollars. The Obama administration cannot blame Bush for getting the numbers wrong as it was the Obama administration that came up with the $120 billion in the first place. Obama should fire the number crunchers that missed the totals by a mere $130 billion dollars.

What is particularly troubling about this newest revelation about the Obama administration's inability to get anything correct is this simply appears to be another way to add a tax to the already overly taxed American public without any oversight. The banking industry bail out was precipitated by them "feeling" not only the American public but American businesses to the point of destroying many small businesses and bankrupting many individuals. The originated mortgages where sold to Fannie Mae and Freddie Mac. Those mortgages were then resold by Fannie Mae and Freddie Mac as MBS (Mortgage Back Securities). So both Fannie Mae and Freddie Mac got paid as well. So why is the American taxpayer now being forced to "bailout" Fannie Mae and Freddie Mac? The bigger question is, where's the money? They have clearly demonstrated an inability to manage their money. That inability, if not criminal, is so grossly incompetent it should be dealt with in the harshest way. If I ran my corporations that way I would be been broke and forced into bankruptcy long ago.

In the news story it was disclosed that Fannie Mae and Freddie Mac have about 31 million mortgages. The commentator went on by saying that the $259 billion dollar bailout would cost every man, woman and child in the U.S. $835. Fannie Mae, Freddie Mac and the securities investors should pay for these mistakes, not the American taxpayer. Here's a simple solution that will not only stimulate the economy, but place the cost squarely at the feet of Fannie Mae, Freddie Mac and all who profited from their ill conceived, if not criminal actions. If you take the $250 billion and divide it by the 31 million mortgages the result is $8,355 dollars. Forgive $8,355 dollars in principal of every mortgage involved in this mess and recalculate each of those mortgages on behalf of the payees. If Fannie Mae and Freddie Mac can't figure out how to do those calculations have them call my office, we do it every day.

John C. Parker, Kenai

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