The Beat Goes On - Fannie and Freddie
March 3, 2011
Last week I posted some information about Fannie Mae and Freddie Mac, the two Government Sponsored Entities (GSE) that the Congress and the Obama administration are proposing to either eliminate or reform. Both entities have been losing money continuously as the loans that they purchased are in default. These mortgage defaults lead to losses and because these GSEs are government backed, the government is paying out taxpayer funds to keep them afloat.
Exactly how to reform or eliminate these important players in the housing finance marketplace is going to be a major challenge. Being too aggressive in downsizing them and the housing market may suffer a major setback. Not doing anything keeps the red ink flowing and the national deficit growing.
There have been some thoughtful editorials about how the transformation might best be handled. To date there is a great deal of conversation, but no impending proposals to change the laws and regulations.
The Fannie/Freddie saga is a fairly focused area that needs change. Watching how it unfolds will reveal where are elected officials really stand on deficit reduction issues.
Last week I posted some information about Fannie Mae and Freddie Mac, the two Government Sponsored Entities (GSE) that the Congress and the Obama administration are proposing to either eliminate or reform. Both entities have been losing money continuously as the loans that they purchased are in default. These mortgage defaults lead to losses and because these GSEs are government backed, the government is paying out taxpayer funds to keep them afloat.
Exactly how to reform or eliminate these important players in the housing finance marketplace is going to be a major challenge. Being too aggressive in downsizing them and the housing market may suffer a major setback. Not doing anything keeps the red ink flowing and the national deficit growing.
There have been some thoughtful editorials about how the transformation might best be handled. To date there is a great deal of conversation, but no impending proposals to change the laws and regulations.
The Fannie/Freddie saga is a fairly focused area that needs change. Watching how it unfolds will reveal where are elected officials really stand on deficit reduction issues.
posted by shirley harry at 8:08 AM
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