The Treasury Department is investigating a report that Freddie Mac, the mortgage giant, bet against homeowners’ ability to refinance their loans even as it was making it more difficult for them to do so, Jay Carney, a White House spokesman, said on Monday.
New details from Newt Gingrich’s contracts worth $1.6 million with Freddie Mac show that the Republican hopeful wasn’t just a boardroom consultant, but served as a high-profile booster for the beleaguered organization. He even gave a rallying speech to dozens of the group’s political action committee donors in the spring of 2007.
–Politico, Newt Gingrich rallied Freddie Mac’s troops
In case you missed it let me try to recap some of the key events of the last few days. Newt admitted that he made millions from a government sponsored enterprise. The same enterprise that played a key role in the housing bubble that drover our economy in a ditch. But he was a historian for the company, not a lobbyist. Newt accused Mitt of being in bed with Goldman, Sachs by owning shares of the evil investment bank (GS actually manages Mitt’s fortune in a blind trust). Mitt’s henchmen figured out that Newt actually owns Goldman shares in a mutual fund as well and stung him in the last debate. Something for which Newt had no answer.
NPR, another government sponsored entity just BTW, uncovered a story about how Freddie Mac has been betting billions against the ability of Americans to refinance their mortgages. The problem is that Freddie is the one who is suppose to be helping them refinance those same mortgages, to save money or stave of foreclosure.
It is unclear whether the Freddie historian is available for a consult.
The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac, is a public government sponsored enterprise. On September 7, 2008, Federal Housing Finance Agency (FHFA) director James B. Lockhart III announced he had put Fannie Mae and Freddie Mac under the conservatorship of the FHFA (see Federal takeover of Fannie Mae and Freddie Mac). The action has been described as “one of the most sweeping government interventions in private financial markets in decades” potentially reaching $100 billion.