Fannie-Freddie Fox to Clean Fannie-Freddie Chickencoop
Mortgage Giants' Mess Falls to Their Regulator
By David S. Hilzenrath and Zachary A. Goldfarb Washington Post Staff Writers Thursday, September 11, 2008; D01
With the government's seizure of Fannie Mae and Freddie Mac on Sunday, the federal regulator who oversaw the mortgage giants during their long descent is now in charge of restoring them to financial health.
In the months before the takeover, James B. Lockhart III repeatedly assured investors that the mortgage giants were financially sound. In March, he even called fears about a government bailout "nonsense" as he reduced the financial cushion they were required to maintain.
He eventually came to a different conclusion, deciding the companies were in perilous shape and would pose a major risk to financial markets if the government did not intervene.
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Why is this not a surprise in the culture of Washington under Bush? If things are on track and the time…