Grassley seeks answers on Fannie Mae, Freddie Mac
BUSINESS RECORD STAFF Apr 8, 2015 | 4:49 pm
1 min read time
227 wordsAll Latest News, Government Policy and LawSen. Charles Grassley wants federal officials to uncloak documents surrounding a 2012 decision to alter the terms of the taxpayer bailout of housing agencies Fannie Mae and Freddie Mac, The New York Times reported.
For almost two years, shareholders of Fannie Mae and Freddie Mac have been asking why officials allowed the mortgage finance giants to divert all of their earnings to the U.S. Treasury Department rather than let them repay taxpayers under the original bailout agreement.
But the government has declined to disclose documents relating to that decision, contending that some may be subject to presidential privilege.
Grassley, who is chairman of the Senate Judiciary Committee, sent letters to the U.S. Justice Department and the Treasury asking for details about the decision and why the government has kept such a tight lid on documents relating to it.
Fannie Mae and Freddie Mac were established by the government to provide backing for home loans. They were humbled by the mortgage debacle of 2008. That September, the government placed both into conservatorship. They received $187.5 billion from taxpayers to cover their losses.
Initially, Fannie and Freddie paid interest on the taxpayer loan. But in August 2012, the Treasury Department and the companies’ conservator, the Federal Housing Finance Agency, amended the deal to allow the government to sweep all the companies’ earnings into the Treasury.