U.S. Rep. Marcy Kaptur Tuesday called on Congress to do its part to investigate mortgage agency Freddie Mac following reports by National Public Radio and ProPublica that Freddie Mac "bet against" struggling homeowners.
Kaptur said she introduced legislation in 2009 to investigate decision making within the Federal Home Loan Mortgage Corp. (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae).
According to the reports by NPR and ProPublica, Freddie Mac placed multibillion-dollar bets that would pay out only if homeowners stayed trapped in expensive mortgages with interest rates well above current rates. In 2008, both Fannie Mae and Freddie Mac were bailed out by U.S. taxpayers and placed in federal conservatorship under the Federal Housing Finance Agency (FHFA).
“It is completely unacceptable for Freddie Mac to be positioning itself to benefit at the expense of American homeowners—and taxpayers were left with the bill,” Kaptur said. “It is well past time for the United States Congress to fully investigate the inner dealings between Freddie, Fannie, and Wall Street. FHFA clearly sat idly on the sidelines while American homeowners were used as financial pawns.”
ProPublica's Tuesday follow-up: http://www.propublica.org/article/bets-against-homeowners-must-stop-freddie-mac-was-told.