Pence renews call to end bailouts for Fannie and Freddie

“With the national debt at nearly $14 trillion and unemployment still near 10 percent, the administration has yet to stop the bailouts of Fannie Mae and Freddie Mac,” Pence said in prepared remarks. 

“I call on the administration to put the interests of the American people first and end its continued bailouts of Fannie Mae and Freddie Mac,” he said. “It is past time to rid the American taxpayer of the liabilities of these financial institutions once and for all.” 

Treasury Secretary Timothy Geithner on Tuesday met with a diverse group of finance and housing experts to discuss the future of housing finance. 

Geithner called for major reform of the mortgage giants, but also said continued government support of housing finance was essential to keeping mortgage rates affordable. 

Fannie and Freddie currently buy approximately two-thirds of new mortgages, which allows banks to offer lower rates to their customers. 

Many of the mortgages recently purchased were toxic, however, forcing the government to spend roughly $150 billion to keep Fannie and Freddie solvent.  

Pence stressed that whatever shape the mortgage giants take in the future, there should be no possibility of another bailout. 

“They [the administration] would do well to remember that underwriting every bad loan in America is not the answer,” he said.

The Treasury conference did not focus on winding down the mortgage giants, but Geithner strongly suggested that the prospect of future bailouts was not an option.

“It is not tenable to leave in place the system we have today,” Geithner said. “We will not support returning Fannie and Freddie to the role they played before conservatorship, where they fought to take market share from private competitors while enjoying the privilege of government support.”