All real estate investors can expect bad news regarding this 4th quarter of 2009 after Freddie and Fannie requested a $400 billion ceiling in their credit pool.With this increase in available credit for the federal corporations, the Obama administration simply avoids the embarrassment and humiliation of addressing the failures of these institutions in public media, after all they already received more bailout money than any other corporation due to their close ties with government officials.

There is no better example of what happens when the government tries to manage a market than what has happened to these 2 government corporation and the corresponding performance of the housing market. Amid rising defaults, both made unusual disclosures recently, noting that the government’s pressure on them to assist the housing market could cost taxpayers.

But by lifting their credit lifelines, Congress avoided yet another bailout for Fannie and Freddie from an already embattled, bailout-happy Congress.

Consequently, even more tax payer dollars will go to the undeserved executive bonuses that the leaders of Fannie and Freddie will receive, since they got their bailout money before the initial pay guidelines were in place, and the increase in available credit does technically constitute a bailout.

Unlike Citigroup, Bank of America, AIG, Chrysler, and GM, Congress deemed that Fannie Mae and Freddie Mac had not received “exceptional assistance” and therefore did not have to have their pay decisions scrutinized by the pay czar.

As poorly as these two institutions have performed over the past year, the possibility of their executives receiving their $6 million pay seems ridiculous.

In 2009 the credit lines for each of them were already increased from $100 billion to over $200 billion, and now they are requesting to have that amount doubled again to total more than $800 billion, which is backed only by our governments willingness to pay the interest, with taxpayer dollars. With a combined total of over 100 billion of our taxpayer dollars already doled out to Fannie and Freddie, the government simply allows more money for them.

Typically they buy mortgages from banks and bundle them for re-sale to investors who desire the yield indicated. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion, or about half of all mortgages, reports indicate. Add in the 100’s of billions of dollars in securitizations remaining to be included in their balance sheets and you can see just how bleak things are for tax payers.

With the added padding of the funny money policies of the Treasury’s newly introduced flexible financing formula, Fannie and Freddie now get more tax payer money founded on a formula which increases their assistance based on the amount of money the lose each quarter. President Obama and this bailout happy congress have continued to boast about their efforts to stabilize the national real estate market through Fannie and Freddie, even while each federal corporation is under conservatorship and has been completely ineffective at it’s mission of preserving home prices.

As a taxpayer, you are left to wonder why all of your money is being spent on a secret bailout for federal corporations whose portfolios only continue to decline in value, by our President whose plans to stop or slow foreclosure have been an abject failure.