Fannie-Freddie Outrages: Bonuses and Subsidies for McMansions
Washington, D.C., November 16, 2011 — As the House Oversight Committee holds a hearing on the granting of nearly $13 million in bonuses for executives of Fannie Mae and Freddie Mac, CEI’s Director of the Center for Investors and Entrepreneurs John Berlau explains why Americans should be doubly outraged at Fannie and Freddie and at their enablers in Congress.
In his recent National Review op-ed, “What About Fannie Mae Millionaires?,” Berlau details how Congress may be on the verge of enlarging Fannie and Freddie’s role in the housing market and at the same time increasing government subsidies to millionaire owners of McMansions. Last month, the Democrat-controlled Senate and a handful of Republicans voted to hike the conforming loan limit for mortgages that Fannie and Freddie can buy and the Federal Housing Administration can insure to $729, 750.
“If this increased loan limit becomes law,” Berlau writes, “it would mean that purchasers of these expensive homes — millionaires and near-millionaires almost by definition — could save thousands of dollars from below-market interest rates thanks to government guarantees.”
The House may decide as early as this week whether to go along with these McMansion subsidies. CEI has joined Americans for Prosperity, Americans for tax reform, and other public policy groups in a coalition letter calling on Congress to oppose raising the loan limits in the looming “minibus” appropriations bill.