Cheat Sheet
The Best In Brief
Sale of Fannie Mae Tax Credits Blocked
The U.S. Treasury prevented Fannie Mae from selling nearly $3 billion in low-income housing tax credits Friday because it concluded the sale would be too expensive for taxpayers. Fannie had made a deal to sell about half its $5.2 billion in tax credits to Goldman Sachs and Berkshire Hathaway and had gotten the go-ahead from its federal regulator. Because Fannie doesn’t have taxable income to offset, the credits are worthless to the company, and every quarter it must write them down as they lose value. A day earlier, Fannie had announced $520 million in losses related to the credits in the third quarter, and that more were coming unless the credits were sold. But Treasury concluded that the government would lose more tax dollars than it saved if the sale went through.
Partner Sites: Expedia| Hotels| Hotwire| Urbanspoon| Vimeo
its about time
these tax credits were invented in the 80s to stimulate stupid lending to people who cant afford to borrow
now that it finally (and predictably) went bust the feds are wising up
You should understand what LIHTC are before you make such statements. You wouldn't want people to think you are ignorant http://en.wikipedia.org/wiki/Low-Income_Housing_Tax_Credit. The tax credits are used for the development of low income rental housing. The default rate for such projects is extremely low.
"But Treasury concluded that the government would lose more tax dollars than it saved if the sale went through."
Duh. No shit. I can't believe this shell game that's going on. Tax credits can only be used if you make enough money to owe taxes equal to, or greater than the tax credit, before the tax credit expires. Fannie Mae, obviously, did not or will not. These tax credits are "non-refundable", and should not be transferred. I can't believe GS actually tried to pull this off. I can't believe the "regulator" approved it. They are getting more and more brazen. If FM needs money, they can easily get it from the Treasury. GS was trying to act as a "middle man", and, in essence, draw a fee at taxpayer expense. This nonsense has to stop.
This post has been up since last night. This is exactly what people should be most concerned about. But there's only one comment, and that's not even accurate. However, posts about Sarah Palin or Michele Bachman would have at least 100 comments by now.
Hey Fat Freddy, thanks for the post.
I agree, most of americas attention is diverted toward sensationalized idiot speak versus watching what is really going on.
GS has managed to get their hands on Billions upon Billions of dollars through pass through government bailouts.
It is not surprising that GS was the largest beneficiary of the AIG bailout.
And now this... I want to know who that regulator is and why he/she still has a job.
yes this came in last night, not as easy to read as the SP headlines.
I guess what i mean is the impact is that Fannie wont get the money, and the impact of that is that Fannie will write fewer of he high risk loans that they specialize in
i am not so upset at goldman, look if the government is stupid enough to do things like sell tax credits then why not take advantage of it?
to me this points to the core problem... that the government for years was promoting home loans for people who couldnt afford them. Low interest rates, the very existence of fannie and freddie, community banking rules, this tax credit gimmick and political pressure all contributed to the housing bubble.
Oh who are they kidding? They will just go through the back door on this sale and the media will bury it's inked head. Kynda like what MSNBC is doing now, trying to make us think the Ft. Hood shooter was just any American who lost it because he was so stressed. What an insult. That freak is a terrorist doing a terrorist and...DO THEY THINK WE ARE BLIND OR DO THEY THINK WE BUY WHAT THEY SAY JUST BECAUSE THEY SAY IT....BS!
Wow. Seems like people should look out for you at their workplace...
Yeah, because MSNBC controls all of the news organizations and what they report too. That MSNBC and their evil ways. When will they ever learn?
When the economy began to tank, the people said: "We want a hand at the tiller!".... The Republicans heard: "We want a hand IN the till"... and so it went.
In 2004, economist were writing about the insane multiples of risk being generated by AIG style scams. It was obvious something needed to be done, or disaster was about to strike.
Instead, we had a government run by War Profiteers and Haliburton, all eager to stick their finger in the War (and subsequent) Energy disaster till. GWB doubled the debt, left behind a $1.2 Trillion deficit in his last budget and tanked the economy. Now the "Party of No" believes the only good health-care plan is one that makes the Insurance and Pharma industry richer... to heck with the "Patients", whoever those losers are.. they didn't give any kick-backs...
Personally, I'm disgusted and waaay tired of CONs getting away with criminal activity in this country, simply because they slimed their way into elected office, using lobby money from the corporations they are SUPPOSED to regulate.
After the CONs doubled the debt, and tanked the economy giving away the farm to Wall-Street, the War Industry, the Oil Tycoons and the top 1% of the "Richie-Rich", it is a slap in the face to have these twerps claim they are voting against a health-care policy that benefits working people because they are 'fiscally responsible"... what a laugh.
Thank you.
As a first time user, your comment has been submitted for review. It can take anywhere from a few hours to a day or two for your comment to be reviewed, depending on the time of week and the volume of comments we receive.
Please log in to leave comments.