Update at 7:20 p.m. ET
Former House speaker Newt Gingrich highlighted the benefits of Freddie Mac’s business model in 2007 — a position that appears to contradict his assertion that he warned the mortgage company of its “insane” business practices.
In an interview posted in an archived version of Freddie Mac’s website, Gingrich discusses the so-called government-supported enterprise model, dubbed GSEs. “While we need to improve the regulations of the GSEs, I would be very cautious about fundamentally changing their role or the model itself,” he said.
He went on to praise Freddie Mac’s and Fannie Mae’s “important contribution” to homeownership.
Asked about his consulting work for the quasi-governmental housing agency at a Nov. 9 presidential debate, Gingrich said he had offered advice as a historian and sharply criticized its approach.
“When they walked in and said to me, we are now making loans to people who have no credit history and have no record of paying back anything, but that’s what the government wants us to do, is I said — I said to them at the time: “This is a bubble. This insane. This is impossible,’ ” Gingrich said during the debate in Michigan.
That’s not the tone Gingrich takes in the Freddie Mac interview in which he touts the GSE model.
“There is not much support for the idea of removing the GSE charters from Freddie Mac and Fannie Mae,” he said. “And it’s clear why. The housing GSEs have made an important contribution to homeownerhip and the housing finance system. We have a much more liquid and stable housing finance system that we would have had without the GSEs.”
Gingrich spokesman R.C. Hammond said the Freddie Mac interview, first reported by The Wall Street Journal, demonstrated Gingrich was “advocating for improved regulation.”
“As to whether Newt now advocates a more aggressive overhaul of Fannie and Freddie than he previously did, of course he does,” Hammond said in an e-mail. “The total collapse of the global financial system has a tendency to make one look at a situation with a fresh set of eyes.”
Gingrich, who now sits atop national GOP presidential polls, has faced numerous questions in recent weeks about his consulting work on behalf of Freddie Mac.