Corker writes Geithner for answers on increased support for mortgage giants

Sen. Bob Corker (R-Tenn.) pressed the Obama administration on Monday for answers about the government's continued support for two mortgage giants.

Corker, a member of the Senate Banking Committee, wrote Treasury Secretary Tim Geithner to demand answers about the decision to do away with limits on the amount of credit the U.S. government could extend to Fannie Mae and Freddie Mac.

"Those amendments removed the $200 billion per enterprise cap ($400 billion total) and, in effect, wrote a blank check for the amount of 'credit' that will be made available to the two mortgage giants," Corker wrote of the amendments the Treasury made in late December to its bailout agreements with Fannie and Freddie.

Republicans have heightened their rhetoric against the home loan giants, which were placed into government conservatorship in fall of 2008, as of late. Sen. Judd Gregg (R-N.H.) called for the companies' privitization this morning, while Rep. Barney Frank (D-Mass.), the chairman of the House Financial Services Committee, defended the extension of credit (and the losses likely as a result) as part of those companies having become a public policy instrument.

"I remain concerned about the lack of understanding and transparency around this arrangement to the American taxpayer and the investors here and abroad," Corker said.

Corker asked for answers from Geithner on whether or not the Treasury secretary considers the new support "nationalization" of the companies, and asked for answers as to whether the U.S. is likely to recover its support for the companies. Corker also wanted a response to Frank's point, asking "to what degree" Fannie and Freddie have been directed to make subprime or other risky loans to stabilize the housing market.

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