Obama told supporters in Davenport, Iowa that Fannie Mae and Freddie Mac’s privileged status as a “quasi-governmental” institution allowed them to extend risky, subprime mortgages to homeowners because they operated under the assumption “the government will probably guarantee it.”
“When things go bad, they expect the taxpayers to bail them out,” the senator said, sounding as if he opposed a bailout.
In his very next breath, Obama promised assistance for Fannie and Freddie.
“As president, I would not allow them to collapse,” Obama said. “I would like to be able to punish them for their bad decisions but the problem is, they are too central right now as to how the housing market works.”