Chairman of the House Financial Services Committee Barney Frank said Friday "I believe this committee will be recommending abolishing both Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance." The Treasury has poured more than $100 billion into these two quasi-government institutions, providing a government backstop to Fannie and Freddie in their role as guarantors of more than $5 trillion in home mortgages.
According to one perceptive blogger: "Fannie and Freddie stood ready to make a market in these toxic assets, to provide the liquidity so that the profit-seekers could lay off the risk on another entity. Without Fannie and Freddie the whole rotten mess couldn't have happened. They didn't point the gun and they didn't pull the trigger; but they sold the bullets. They were enablers that allowed the greedy bankers to successfully realize their aims."
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