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Senate Banking Committee Chairman Chris Dodd (D-CT) wants Treasury Secretary Henry Paulson to testify before Congress about the government's takeover Fannie Mae and Freddie Mac.
Paulson had repeatedly urged lawmakers to approve the bill, saying it was only a short-term measure that would likely not be used.
Dodd earlier expressed concern over the administration's announcement on Sunday of the takeover. "There are still many unanswered questions about the Administration's plan, and Americans deserve to know if this unprecedented proposal will help keep mortgages affordable... we need to understand the circumstances which led the Administration to change course. Just weeks ago, Secretary Paulson testified that he thought he would never use this authority- a message he reiterated until very recently," he said in a written statement over the weekend.
It creates a new regulator for the two companies, called the Federal Housing Finance Agency; and modernizes the Federal Housing Administration. It provides $300 billion to help 400,000 homeowners avoid foreclosure through more affordable, fixed-rate mortgages.
The Hidden Bailout Of $1.4 Trillion In Fannie / Freddie Credit-Default Swaps
Something extraordinary happened on Monday, September the 8th, 2008. The government takeover of Fannie Mae and Freddie Mac triggered the pending settlement of $1.4 trillion in credit-default swaps. This single event could have led to a cascading series of failures that might have bankrupted Wall Street and much of the rest of the financial world by the end of the week. That isn't happening, and indeed, the media is treating this as something close to a non-event. However, a very real $1.4 trillion event happened whose resolution effectively constitutes one of the largest government bailouts in history.