Jan 9, 2008

Henry Paulson on expanding the role of Fannie Mae and Freddie Mac to deal with the mortgage mess

If we ever need them it's during times like today, and they're most valuable when there is distress in the mortgage market. I'd like to see them playing an even bigger role.

~ Henry Paulson, Treasury Secretary, "Paulson Shifts on Mortgages; Treasury Secretary SeeksBroad Moves by Lenders;'Not Business as Usual'," The Wall Street Journal, November 21, 2007

(Mr. Paulson faulted Congress for failing to pass several bills that could potentially provide relief for borrowers, and took aim at a Republican senator who is holding up a piece of legislation that would allow the Federal Housing Administration to play a greater role in the cleanup. While the Bush administration and Democrats in Congress backed the bill, Oklahoma Republican Sen. Tom Coburn objected, saying it will result in additional risky loans for which taxpayers will be liable.

Mr. Paulson said he understands Mr. Coburn's concerns, but notes: "This is not business as usual. This is an extraordinary situation.")

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