New investigation reveals Freddie Mac profits when American homeowners lose
An unidentified man walks from the Freddie Mac offices on August 11, 2010, in McLean, Virginia.
Government sponsored Freddie Mac has invested billions of dollars in mortgage securities that appreciate when homeowners fail to refinance high-rate mortgages and is also making homeowners’ path to lower-rate mortgages more difficult, according to a joint investigation by NPR and ProPublica.
The enterprise, according to Freddie Mac’s website, has “a public mission to stabilize the nation's residential mortgage markets and expand opportunities for homeownership.” The investigation found that the mortgage giant profits from homeowners’ refinance disqualifications, which poses a potentially severe conflict of interest. The Federal Housing Finance Agency, which controls Freddie Mac, maintains there is a wall between the investment and lending branches of the organization to prevent these kinds of conflicts of interest, which seems to indicate that Freddie Mac indeed “wins” when homeowners lose even in the best-case scenario. Freddie Mac declined to be interviewed for the story, so Patt checks with one of the reporters and an analyst who explains their practices.
WEIGH IN:
How appropriate is it for tax-payer funded Freddie Mac to have a vested interest in homeowner’s misfortunes? Are homeowners being set up to fail?
Guests:
Jesse Eisinger, reporter with ProPublica and co-writer of the piece
Ted Frank, adjunct fellow with the Manhattan Institute’s Center for Legal Policy and editor of the Institute’s award-winning web magazine, PointofLaw.com
- Patt Morrison for January 30, 2012
- New investigation reveals Freddie Mac profits when American homeowners lose
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- Remembering Daniel Pearl: his life and legacy
Also on this episode
Events
Comedy Congress Live
Wednesday, February 29, 2012
7:30 p.m.
- 9 p.m.
Tickets for this event are sold out. Please email Forum Coordinator Jenny Smith at jsmith@kpcc.org to be added to the waitlist. Thank you!
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