You can now read 10 articles a month for free. Read as much as you want anywhere and anytime for just 99¢.

Romney pummels, profits from Fannie, Freddie

WASHINGTON – Republican presidential candidate Mitt Romney has long been critical of Fannie Mae and Freddie Mac, blaming the government-backed housing lenders for inducing the home-mortgage crisis and saying they have become too unwieldy.

“I look at Fannie and Freddie and just think that obviously they’ve grown massively beyond the scope that had been envisioned for them originally,” he said two weeks ago at a forum in South Carolina. “The failures of Fannie Mae, Freddie Mac, Barney Frank, Chris Dodd are just so legion that we have to rethink about how we’re going to support a growing housing industry.”

Continue reading below

Yet Romney has profited from investments that were made in both government entities, according to his personal finance disclosure forms and documents compiled by American Bridge, one of several Democratic groups in Washington formed to back the election campaigns of Obama and other Democrats.

The issue illustrates the potential perils for a candidate with vast financial holdings whose rhetoric does not necessarily match his investment interests.

“Once again, Mitt Romney has proven his hypocrisy knows no limits,” said Ty Matsdorf, spokesman for American Bridge, which was formed earlier this year and has been going through the records of President Obama’s potential opponents. “To continually attack the housing crisis, yet invest up to a half a million dollars in the major players is absolutely mind boggling. I didn’t know a person could flip flop on themselves, but Romney has proven that wrong.”

On his financial disclosure statement filed last month, Romney reported owning between $250,001 and $500,000 in a mutual fund that invests in debt notes of Fannie Mae, Freddie Mac, among other government entities. Over the previous year, he had reported earning between $15,001 and $50,000 in interest from those investments.

And unlike most of Romney’s financial holdings, which are held in a blind trust that is overseen by a trustee and not known to Romney, this particular investment was among those that would have been known to Romney.

The investment was also not on Romney’s 2007 financial disclosure form. A Romney aide said the investments were made in the latter half of 2007, after he had filed the earlier disclosure form. That was around the time that the scale of the housing crisis was coming into focus.

The campaign declined to comment on the record. The Romney aide said the investment was made by Romney’s charitable trust.

Romney made the investment in a mutual fund called the Government Obligation Fund, managed by Federated Investors Inc. The fund invests in a wide variety of sources, including government agencies and US Treasury notes. But out of a $28.5 billion portfolio, nearly half of the fund was in Fannie Mae, Freddie Mac, and Federal Home Loan Bank notes, according to an SEC filing made in April.

In addition to Fannie Mae and Freddie Mac, the fund also has investments in investment agreements with several banks that received federal bailout money, including Bank of America, Goldman Sachs, Wells Fargo, and JP Morgan.

The investments make up a tiny part of Romney’s financial holdings, which were detailed in a personal financial disclosure statement filed last month with the Federal Election Commission. His campaign said at the time that the former Massachusetts governor is worth between $190 million and $250 million.

Matt Viser can be reached at maviser@globe.com.
Loading comments...

You have reached the limit of 10 free articles in a month

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week