This afternoon in Center City Philadelphia, Pat Toomey delivered a lengthy rebuke of opponent Joe Sestak’s handling of Fannie Mae and Freddie Mac, the two government backed mortgage giants that were at the center of the collapse of the consumer mortgage market in 2008.
As a congressman in 2000 and 2003, Toomey co-sponsored legislation that ultimately “languished,” Toomey said, as “politicians whistled past the graveyard.” Toomey’s legislation would have established new regulatory controls over federal mortgage lending, increased minimum consumer down-payments, and brought oversight under the U.S. Treasury.
Toomey characterized these reforms as having had the potential to mitigate or eliminate the bubble that ultimately ended with collapse of the housing market and broader economy.
Now, a decade after his first calls for reforming Fannie Mae and Freddie Mac, Toomey’s approach toward the government sponsored entities has evolved.
Toomey spoke with Battle ‘10 about his plan for reforming the groups moving forward.
“I think we’re much better off moving in the direction where we scale down and sell off Fannie and Freddie,” said Toomey, “and get away from this quasi-public, quasi-private arrangement.”
“It became very clear that as an arrangement where private shareholders got all the upside, and the taxpayer had all the risk,” Toomey told Battle ‘10.
“And it didn’t work out so well for the taxpayer. So I wouldn’t want to replicate this.”
Battle ‘10 has an in-depth look at Toomey’s policy speech here.