Over a year ago, Treasury Secretary Hank Paulson refused to push for reforms of fraud-ridden government-backed mortgage giant Fannie Mae, even though colleagues in the Bush Administration had long been advocating them. Why? Because he thought it would look “political” and offend powerful liberal Senators like Charles Schumer and Chris Dodd and Congressman Barney Frank, who have long blocked any reform of Fannie Mae. Fannie Mae has long been managed by liberal power brokers, who engaged in a massive accounting scandal. Now, a federal bailout of it is being planned.
A Washington Post editorial today notes that mortgage bailout legislation would perversely give Fannie Mae even more ability to buy up high-risk mortgages in the future. We earlier explained how the bailout legislation, orchestrated by Frank, Schumer, and Dodd, would further destabilize housing markets and reward irresponsible lenders and borrowers, while siphoning taxpayers’ money to left-wing special interest groups like ACORN, which promoted practices like liar loans that helped trigger the mortgage crisis, and which has concealed embezzlement and engaged in voting fraud.