Tales from Bailout Nation Pt. XXIV.5

When we blogged a few days ago about Fannie and Freddie regulator, Armando Falcon's, testimony before Congress with respect to the attacks unleashed upon him by those GSEs when he had the temerity to suggest that those two GSEs might be on some questionable financial footing because of loose lending practices and Enron-like accounting practices, we left out a minor detail, though, it's one that should not surprise you if you've been a regular reader: Fannie and Freddie are still going to require a wee more bit o' cash.

A pair of former regulators who oversaw Fannie Mae and Freddie Mac told a panel Friday that the two government sponsored enterprises - which taxpayers have already bailed out to the tune of $125 billion - will likely need even more aid.

Their testimony came on the third and final day of this week's Financial Crisis Inquiry Commission hearings on securitization and subprime lending. The panel tasked with determining the factors that contributed to the financial crisis.

Armando Falcon and James Lockhart, former directors of the Office of Federal Housing Enterprise Oversight, said the price tag for taxpayers would almost certainly climb, as Fannie Mae and Freddie Mac to draw on their credit lines.

And how much more tax-payer cash are Fannie and Freddie going to require? Does it matter? Let's hit the way-back button to this past Christmas Eve, yes, Christmas Eve when Treasury boss and two-time tax cheat, Timothy Geithner, effectively removed the cap on how much more money could be poured into Fannie and Freddie.

The Obama administration pledged on Thursday to back beleaguered mortgage finance giants Fannie Mae and Freddie Mac no matter how big their losses may be in the next three years.

It also jettisoned a demand that the two companies cut the size of their mortgage-related investment portfolios next year, allowing them to provide even more support in the near term for a housing market recovering from its worst slump in decades.

Fannie and Freddie are still holding these toxic assets and not only is there not any incentive for them to shed them so we can begin a true recovery in the housing market there is not any incentive for them to continue bad lending practices.

Why we are even bothering holding these hearings is a mystery to us.