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Thursday, April 30, 2015
CORKER: FHFA STRESS TEST YET ANOTHER STARK REMINDER OF NEED FOR GSE REFORM
Report Shows Fannie Mae and Freddie Mac Could Require $157 Billion Taxpayer Bailout During a Future Crisis
WASHINGTON – U.S. Senator Bob Corker (R-Tenn.), a member of the Senate Banking Committee, today released the following statement regarding a Federal Housing Finance Agency (FHFA) report that indicates government-sponsored enterprises Fannie Mae and Freddie Mac could require a $157 billion taxpayer bailout to keep them afloat during a future crisis.
“Today’s FHFA stress test is yet another stark reminder of the need for Congress to wind down Fannie Mae and Freddie Mac and reform our housing finance system,” said Corker. “With control of both houses and with the amount of effort that has been put forth to develop a bipartisan, bicameral consensus, this Republican-led Congress has the opportunity to demonstrate it is serious about protecting American taxpayers, and I hope we will not let this opportunity pass us by.”
Legislation first introduced by Corker and Senator Mark Warner (D-Va.) in June 2013, the Housing Finance Reform and Taxpayer Protection Act (S.1217), passed the Senate Banking Committee in May 2014 by a vote of 13 to 9.
During the 2008 financial crisis, Fannie Mae and Freddie Mac were taken into government conservatorship and given a $188 billion capital injection from taxpayers to stay afloat. As a result, the private market almost completely disappeared, and nearly every loan made in America today comes with a full government guarantee. Despite this unsustainable situation, there still has been no real reform to our housing finance system.