9:39 PM
Julio Barreto
The takeover of Fannie Mae and Freddie Mac includes a decision to fund the bail out off budget. This means funding for the bail out will not be subject to congressional budget rules requiring off sets for every dollar spent. This provides some assurances that no cuts will occur to housing and community development programs as offsets to fund the bail out.A potential casualty to the bail out; however, could be the housing trust fund which was part of the bill passed this summer to forestall the mortgage crisis. Funding for the trust fund was based on profits generated from the profits from Fannie Mae and Freddie Mac. A condition of the Federal take over ensures that the Federal government is the primary beneficiary of any profits generated by both entities. Therefore, shareholders are at the...
