GOP senators calling for end to fed control of Fannie Mae

Two of the villains of the 2008 financial collapse were Fannie Mae and Freddie Mac, For a long time it's been a patronage playground for the Democrats. Some GOP senators want to end the fun, as the Washington Post tells us.

As the Senate resumed debate Monday on legislation to overhaul financial regulation, leading Republican lawmakers are pushing an amendment that would wind down the government-controlled mortgage finance giants Fannie Mae and Freddie Mac.

The proposal by Sens. John McCain (Ariz.), Richard C. Shelby (Ala.) and Judd Gregg (N.H.) calls for the government to end its control of the companies within two years. Under the amendment, Fannie and Freddie would have to reduce the size of their mortgage portfolios and begin paying state and local sales taxes.

Congressional aides say the amendment is unlikely to pass. But as Congress argues over what to do with Fannie and Freddie, the hole burns deeper at the companies. Fannie reported Monday that it lost $11.5 billion in the first three months of the year and needed $8.4 billion from taxpayers to stay afloat.

The total price tag for Fannie and Freddie will be $145 billion, easily becoming the costliest element of the government's rescue of the financial system. Last week, Freddie reported a net loss of $6.7 billion in the first quarter and said it needed an additional $10.6 billion in assistance from taxpayers. Fannie's latest earnings report showed that the company continues to lose money on the trillions of dollars in loans it owns or insures. The company reported an increasing number of foreclosures.

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