This transcript is automatically generated
It's a very slippery slope to say well this would help.
That's Edward DeMarco he's the conservative tour of mortgage giants Fannie Mae and Freddie Mac talking to the Wall Street Journal about various proposals for stimulating the housing market and this is power play.
Thanks for hanging out folks and thanks to Tim Carney.
Who is eight an author who is many things who is a great due -- good dad and also the senior political columnist for the Washington examiner.
And we see right now very interesting thing going on in Washington.
So the president knows He can't get a big stimulus and so everybody looked at Ben Bernanke -- the Federal Reserve said -- -- why don't you make a stimulus you can run run off a little stimulus over there that would help us.
And He said I'm not going to do that right now I may come back and give you legislative and I'm not gonna do it right now now every all eyes fall to Fannie Mae and Freddie Mac.
The mortgage giants that have already been bailed out to the tune of some 313.
Billion dollars since they -- -- blew him.
Now if I'm Edward DeMarco.
And I -- the man in charge of keeping these guys on this and a sound fiscal footing -- gotta be a little nervous is someone in Washington these days right.
Well yes and -- Fannie and Freddie fit into the same model as the Federal Reserve which is that they're sort of government.
And to some extent not they're not democratically controlled and another way to put it and that they can sort of as they can send money out and do this sort of thing He saw the bailouts when -- start in 2008 a lot of people don't remember this.
At first it was the Federal Reserve doing it when his Bear Stearns AIG was supposed to do with -- and -- is bailing out the whole banking system.
And so then they had to bring in congress in yet.
I think we have recently discovered not get -- and there were trillions of dollars in hundred -- in loans.
That were given out -- the -- -- -- prop up.
And the FDIC all these things whenever possible Washington wants to do the sort of bailouts and stimulus.
Not through the democratic process right and -- -- That's shows actually wasn't around me you guys -- matter earlier but the change in sort of the tone.
The Democratic Party is afraid of doing of handing out more money do more bailouts is -- Fannie and Freddie is a great place to do it.
Where they can go ahead and they can bail out banks and they can bail out homeowners in a way that could free up discretionary spending by -- and basic.
-- what they want what do what many Democrats and presumably many in the administration wants as we increasingly hear that the president's stimulus third stimulus package and basically calls for a a national refinancing.
Of loans basically what they want Fannie and Freddie to do.
It is true except.
From people who otherwise would not qualify for low rates more people who are underwater on their homeless people -- do not qualify for conventional.
To basically pushed this through.
They see billions of dollars a year in reduced payments that -- -- a direct.
Injection into the economy.
Who's who has my sympathy today as a different mandate.
His job is to make sure that -- Freddie don't collapse and cost the treasury trillions of dollars so can this guy pulled his ground.
And well the funny thing is that those bailouts you were talking we've had a dozen housing bill starting back before TARP but -- since -- Obama and bush.
IE you know if your loan was underwritten by Fannie -- Girardi could have gotten some -- -- Subsidy -- -- a little bit under 5% underwater for -- there's been a ton -- -- they haven't done what the administration didn't do so now what they're asking from DiMarco and Fannie -- is something much bigger we clearly will be costly.
-- this is sort of a reflection of the broader.
Problem if you are Obama right now where you know that the political pressure is towards.
Being frugal bringing down the debt right and you know that your political pressure and maybe -- Ideological instincts are towards.
You know this young -- teens Paul -- -- an idea of giant stimulus to class.
At least in the short term they definitely class and I think this -- problem is exactly that she can people sort of Ronald Reagan cutting.
As well as being Paul -- means spending like crazy.
Well and the good delicious thing about this if you are supply side of -- crew maniac.
If if you are those things they need -- like free money it's just sitting there there there are already under water they're already blown up so why -- what's a little more blown up right.
Yeah and 11 difference I would -- different types of having doubts -- Is this sort of thing that's going to keep people more in debt.
So when we were subsidizing people -- -- on their mortgages we're putting people more debt some of these things that are preventing foreclosure.
They just make people pay a huge chunk of their income for a few more months and then before close again those things have the opposite of the stimulus effect.
So is the Obama administration going to try to -- something that isn't going to just.
Put people more in debt in order to save their homes is He actually gonna try to do something that somehow be more -- I don't think that exist but you know maybe he's got.
Clever -- maybe they've got maybe -- got some skills out there and I listened with interest Maxine Waters yesterday.
-- explicitly threatened to bankrupt.
American lending institutions.
They did not decrease.
Mortgage rates or bail out borrowers now it was a little plane for somebody who's under an ethics investigation -- Allegedly helping direct federal resources to a bank partially -- by her husband.
I thought I thought that was kind of mean but I I notice though that there is.
A great target.
For war this supply siders for these folks.
Inside the Obama administration really keen to stop this fights that are the day insiders -- apologize to demand siders.
In the lending industry in Fannie Mae and Freddie Mac everybody -- in their mortgage.
Everybody hates having a high grade I mean that's it -- when it comes having this discussion that's gotta be politically effective right but.
Also they know they don't want to bankrupt -- next Maxine Waters might want to.
Barack Obama and Tim Geithner did not -- to bankrupt the banks so the form of all these bailouts has been something like.
Bank of America if you reduce.
You know Tim Carney is mortgage principle by X amount.
We will cut you -- 5000 dollar check to see -- banks aren't we get money from the government and it's less likely Carney is gonna default and so.
It's worth it because that's in the form a lot of these have taken.
I don't see that sort of you know burning down the bank rhetoric but they're reflecting the administration they argued -- -- But the -- is -- problem.
The -- of the world are not the problem.
Who are employed sounds citizens doing all of these things the problem exists from all folks who have mortgages they can't afford you bought a house that you could afford.
You look at your salary you look at your savings and you said because I know that you are a -- and reasonable person that you get menus and I'm going to buy a house that I can afford the problem that still looming in the market.
Are you have people who are still in houses.
That they can't afford it interest rates that they shouldn't have gotten that they took -- deal predicated on the -- upward trajectory of housing prices that has occurred.
I think the downside the danger here for the president when every tries to force through at Fannie Mae and Freddie Mac but -- DiMarco let's get past.
Is that He could engender some real resentment.
From the people who have paid their bills yet been on time worked hard and when they look and see the guy across the street -- a bomb get the same it's.
Surprised -- how strong that -- of resentment is.
I saw John McCain lose a lot less enthusiastic support.
When He made a proposal to help we don't -- people's mortgages who were under water.
From people have been responsible I didn't realize how strong political force -- wasn't there and -- lots and lots of you know 556.
Hero to so I spent thirty years paying my mortgage and these guys are gonna get bailed out there you have.