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The Examiner was right to oppose more taxpayer bailouts for Fannie Mae and Freddie Mac, which are expected to receive between $73 billion and $215 billion in additional bailouts over the next three years. Democrats in Congress blocked reform of these mortgage giants in May, making taxpayers foot the bill for this enormous cost.
The Obama administration earlier lifted the $400 billion limit on bailouts for Fannie and Freddie, and showered their executives with $42 million in compensation.
Fannie and Freddie helped spawn the mortgage crisis by creating an artificial demand for risky mortgages, and falsely reporting those mortgages as prime when they clearly had subprime characteristics. As government-sponsored enterprises, they were exempt from the capital requirements that apply to private banks, so they did not have enough reserves to cover their losses when their mortgages started defaulting.