Since 2008 Freddie Mac and sister Fannie Mae have come to own or back a huge number of American mortgages. Their mandate: to help make US housing more affordable. Freddie Mac, along with Fannie Mae, was placed in government conservatorship in 2008 after losing billions of dollars in the housing bust. Now, NPR and ProPublica discover it has been "betting" that homeowners won't be able to refinance into lower interest rate loans--though another sector of the company is responsible for denying or approving ReFi applications.Disturbing details in long ProPublica article here.
Outraged congressman calls for end to the shenanigans.
Is this legal? Of course it is. Though it smacks of unethical.
But it should come as no surprise because:
- Freddie Mac has been bleeding US taxpayers for years now: it loses billions each quarter.
- If anybody knows that home prices are going to continue to decline, it's Freddie Mac. It needs to keep the older, higher rate mortgages on the books for as long as possible, so it doesn't lose the taxpayer any more money. Right? ;0)
- The United States is a banktocracy.
- A home"owner" isn't a person or family to a bank or mortgage guarantor; the mortgage holder is simply a conduit to provide $. And the more $$$, the better.