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Paul Kiesel
Paul Kiesel
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On Rescuing the Mortgage Giants, Fannie & Freddie: McCain vs. Obama

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Barack Obama and John McCain both support efforts to stabilize mortgage finance giants Fannie Mae and Freddie Mac, but only if needed and because both government sponsored entities are central to the housing market (they own more than half of the mortgages in U.S.). However, each candidate would like to change the status quo at the agencies once the current crisis lapses (which might not be until 2010).

Below are the two candidates’ stances on “Rescuing the Mortgage Giants.” To see the candidates’ other economic policies, click here: CNNMoney.com.


· Supports government aid to keep Fannie Mae and Freddie Mac from collapsing.

· Wants to replace the agencies’ management, restrict executive salaries, stop company dividends and end their lobbying if taxpayer money is used to bolster the agencies.

· Missed Senate vote on sweeping housing bill that gives Treasury temporary authority to give Fannie and Freddie an unlimited line of credit and buy stock in the firms if necessary.

“I think the actions taken by the Fed on Fannie and Freddie are correct…I hope that these measures will restore some of the necessary confidence in our institutions.” — McCain


· Supports maintaining agencies’ role in providing capital to the housing market, but believes ultimately they need to be defined either as public or private.

· Says the bailout should not protect the investors or CEOs of Fannie and Freddie.

· Also missed Senate vote on the housing rescue bill, which President Bush signed into law on July 30.

“We’re going to have to provide them with some support. … Long term … we have to go ahead and make a decision. If these are public entities, they they’ve got ot get out of the profit-making business. If they’re private entities, then we don’t bail them out.” — Obama