Fox News’ Laura Ingraham reports that the government has been saving billions of dollars in loans and repos by offering up conventional loan guarantees for the first time in nearly three decades.
The $30 trillion in loan commitments in the Federal Housing Finance Agency’s (FHFA) capital markets portfolio represent roughly 30 percent of the total amount of available Federal Direct Loans, or Fannie Mae and Freddie Mac’s portfolio of loans.
The federal government has provided $5.7 trillion in loans to the private sector to help keep the economy going and to help borrowers with mortgages, according to the FHFA.
In the first half of 2018, there were 4.5 trillion Fannie and Freddie loans outstanding.
“This is the first of its kind,” said Laura Ingram, host of Fox News Sunday.
“We’re making these loans at a time when we have an enormous economic downturn and people are facing massive unemployment.”
She said the loans will help borrowers stay in their homes and are designed to help the economy recover faster.
“In this economic environment, Fannie is not looking to make this a permanent program,” Ingram said.
“The $30bn in loan repurchases are to help our economy get back on track.”
It’s a significant change from the $7 trillion or so the FHA loan guarantees have been providing since the Great Recession, when the agency made a major restructuring of the mortgage market.
Critics of the FHLA program argue that its programs have been wasteful, particularly the large amounts of federal loans that have been sold off.
In response to the criticism, FHSA Director James Zogby said the agency is doing what it can to support the economy and that the loan repurposing is just the beginning.
“We’re looking at how we can make this process more efficient and to better serve our clients,” Zogbysaid.
“It’s not a substitute for making loans.”
Zogby added that there is a clear path to the $30trn loan repurchase program.
The agency has already approved $2.7 billion in Fannie loans that are eligible for the repurchase, and $5 billion in Freddie loans.
The agencies’ plan also includes a loan guarantee program for Fannie, Freddie, and others that are still eligible.
Currently, the government holds about $1 trillion in the Treasury market.
That money is available to finance a variety of projects, including the construction of a new high-speed rail line in Pennsylvania, and the construction and operation of a major nuclear plant in Alabama.
Zagby said there is no limit on the amount of the Treasury loans that can be repurchased under the plan.
“What we’re doing is making it easier for people to get the funds they need to make those investments,” Zagby told reporters.
“There is no cap on the total number of Treasury loans, but there is an amount that can only be reposited in the first three months.”
As for how the $15.5 billion FHLAs will be repaid, Ingraham said the money is in the works.
“I don’t know what it will be, but it’s a nice thought,” Ingraham quipped.
Fox News’ Joe Romm, Contributor and Associate Producer for Fox News, contributed to this report.