Dodd Questions Takeover of Mortgage Giants

Posted September 8, 2008 at 4:12pm

Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) is displeased that the federal government is assuming control over the two housing institutions.

Dodd apologized to reporters for having an “edge” in his voice, saying he was disappointed that Treasury Secretary Henry Paulson thought it necessary to seize control over Freddie Mac and Fannie Mae. Dodd said he was surprised because he thought the quasi-government companies were solvent.

“I thought they were in fairly good shape. They were doing a bit better than some people thought they were doing,” he said.

Dodd was alarmed that Paulson decided to use the authority so soon after the Congress passed the legislation this summer. He complained that the administration — when the bill was under consideration — said it wanted the authority only to send a signal to the markets and had no plans to actually use it.

Dodd said he plans to speak with Paulson on Monday to discuss the ramifications of the takeover, including the cost to taxpayers and the effects on the market.

Dodd also said he would hold a hearing in the coming weeks for Paulson to answer questions.