Freddie Mac: A mess, and likely to stay that way

NEW YORK (CNNMoney) -- It's not tough to find critics of Freddie Mac and Fannie Mae on either the right or the left. But there has been little progress made in rehabilitating the mortgage giants.

Treasury took over the two firms three years ago, and the Obama administration laid out a range of options to reform them nearly a year ago.

Together, they have received $183.8 billion in taxpayer funds to date, making them recipients of the biggest bailout of the financial crisis. So far, the firms have returned more than $30 billion to Treasury through dividends.

Freddie Mac was thrust back into the spotlight when Gingrich's $25,000-a-month contract with Freddie became a point of contention in the Republican presidential primary battle.

Both the Gingrich and Romney campaigns blame Freddie and Fannie for the housing bubble and the financial meltdown that followed. But some experts argue that Wall Street firms, not Freddie and Fannie, were at the root of the bubble and the crisis that followed.

Critics of Fannie and Freddie on the left argue the firms should be more active in helping troubled homeowners refinance or reduce the amount they owe on underwater mortgages.

Now sparking even more criticism of the housing giants is a report out today from NPR and ProPublica contending that Freddie made a series of investments in mortgage securities that would pay off only if homeowners remained trapped in high-interest rate mortgages.

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"Rather than maximizing assistance for homeowners, as they are directed to do by statute, reports indicate that Freddie Mac is betting against homeowners and making a profit when homeowners are not given an opportunity to refinance into lower rates," said Rep. Elijah Cummings, a Maryland Democrat and frequent critic of the firms.

He said the investment by Freddie is a sign that the interim director of the Federal Housing Finance Agency, the regulator overseeing Fannie's and Freddie's reorganization, should be replaced.

Freddie denied Monday that the firm is positioned against having homeowners refinance, although it did confirm the investment itself.

"Refinancing is our bread and butter today," said Freddie spokeswoman Sharon McHale. She said that 74% of mortgages it financed in 2011 were refis, and that it has provided funding for more than four million refinancings since being taken over by the government in 2008.

"We are very committed to helping borrowers refinance their loans," she said.

But McHale said she couldn't comment on debate about reforming Fannie and Freddie. Neither the Treasury department nor the FHFA, had any comment about the lack of progress on reforms. FHFA did say Freddie Mac's investments had had no impact on refinance decisions, and that Freddie had previously agreed not to increase those investments without further consultation with the agency.

Guy Cecala, the CEO of Inside Mortgage Finance, a leading home loan trade publication, said Fannie and Freddie are no longer losing money on the new loans they're funding.

And the lack of a private sector alternative to the government-backed mortgage securities means Congress is in no rush to wind the firms down, despite the rhetoric about the need to do so.

"They're at this point a very necessary evil," he said. "It is unclear how long it will take for a private security market to come back. It's been dead for three years and is showing no signs of life now."

Cecala said that there is little sign of Congressional commitment to action, even on issues where there is broad bipartisan agreement, such as the need to lower the size of mortgages that the firms will back.

"The problem is there have been 20 reform bills introduced," he said. "All that is has done is muddy the waters so much we can't sift through and see what's practical and what's not."