Several months ago, government-backed mortgage companies Fannie Mae and Freddie Mac announced they would help struggling subprime borrowers avoid foreclosure. And before that, both companies had made a commitment to making mortgages affordable for lower-income families. But last week, as the lenders’ troubles worsened, the government seized control of the two mortgage giants, promising $200 billion to keep them solvent. By taking over Fannie and Freddie, the Bush administration effectively admitted the housing market has a long way to go to recover. Yet a real analysis of the gravity of the crisis is missing from major media websites and print and broadcast reports, even as foreclosures and unemployment rise.
Taxpayers, homeowners, and working people are, for the most part, getting sketchy coverage of the mortgage crisis, leaving many to fear what lies ahead without fully understanding how the situation got so bad in the first place. In a recent column, Robert Sheer, editor of Truthdig.com, briefly summarized how the passage of the Commodity Futures Modernization Act in 2000 ended "significant regulation of the financial community" and led to the most "rapid and severe meltdown" in housing values since the Great Depression.
Washington Post reporters Binyamin Appelbaum and Renae Merle opened another window into the crisis with a report on how the suspension of Fannie Mae and Freddie Mac as "private enterprises means the federal government can no longer require them to spend shareholder’s money on affordable-housing programs." According to Appelbaum and Merle, affordable-housing advocates fear that the "government will put the companies’ financial health ahead of the policy goals" to supporting affordable housing.
What is the government’s obligation to making sure affordable housing is available? Did Congress and other elected officials help create the mortgage crisis by easing up on regulations? Are the media providing adequate coverage of the seriousness and extent of the crisis? Or are the media just barely keeping up with events as they unfold? What do ordinary citizens need to know about the government’s role in trying to resolve the crisis?
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