Tags: fannie mae | freddie mac | housing | republicans | slush fund

GOP: Administration's Housing 'Slush Fund' Puts Taxpayers at Risk

By    |   Thursday, 11 Dec 2014 10:15 PM

Congressional Republicans are blasting Federal Housing Finance Agency (FHFA) Director Mel Watt's announcement that Fannie Mae and Freddie Mac will resume making payments to two housing trust funds after a six-year suspension, warning that he is putting taxpayer dollars at risk, The Hill reported.

In announcing the move, Watt, appointed to his position by President Barack Obama last year, cited projections that Fannie and Freddie "will remain profitable for the foreseeable future."

In November 2008, soon after the two housing giants were put into conservatorship by the FHFA, they were barred from making payments to the trust funds which provide support for construction of low-income rental housing.

In announcing the move, Watt cited projections that Fannie and Freddie "will remain profitable for the foreseeable future."

Fannie and Freddie needed a bailout of about $190 billion to stay afloat during the 2008 financial crisis. Congress has yet to agree on a plan that would bring them out of federal conservatorship and reduce the future risk for taxpayers.

Republican Sen. Richard Shelby of Alabama, incoming chairman of the Senate Banking, Housing, and Urban Affairs Committee, criticized Watt's decision, saying it was "misguided" to restore money to the housing "slush funds," The Washington Free Beacon reported.

"With nearly zero capital protecting the taxpayer from losses, Fannie Mae and Freddie Mac are clearly not in the proper financial position to restore contributions to these slush funds," Shelby said. "I strongly oppose Director Watt's decision and will continue to fight to protect taxpayers."

House Financial Services Committee Chairman Jeb Hensarling said Watt timed the move for the end of the 113th Congress "in a transparent effort to evade scrutiny and frustrate congressional oversight."

He vowed to call Watt to testify on the issue early next month.

"Diverting assets to housing trust funds instead of repaying taxpayers or stabilizing Fannie and Freddie's finances only makes matters worse," Hensarling said.

Rep. Maxine Waters, a California Democrat and ranking member of the Financial Services Committee who co-authored legislation creating the housing fund, praised Watt's decision.

She said it was "unconscionable" that there are 7.1 million U.S. households lacking "safe and decent housing," The Hill reported.

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Congressional Republicans are blasting FHFA Director Mel Watt's announcement that Fannie Mae and Freddie Mac will resume making payments to two housing trust funds after a six-year suspension, warning that he is putting taxpayer dollars at risk.
fannie mae, freddie mac, housing, republicans, slush fund
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2014-15-11
Thursday, 11 Dec 2014 10:15 PM
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