Good Riddance Freddie and Fannie?
Can it be that the “homeownership for everyone” army of dreamers has finally been defeated? Let’s hope so.
Someone with sense in the Obama administration has convinced their economic team that Freddie and Fannie brought new meaning to the term “mission creep” and therefore should slowly but surely be killed.
I love this quote from a WSJ article:
Officials portrayed a housing-finance system that would include a role for both the public and private sectors, but would be different from the current system in that the government’s role would be smaller, underwriting standards would be tighter, and borrowers would be required to hold larger amounts of equity in their homes.
Can I get a double Amen?
And then this from the same article:
The cost of mortgages is probably going to go up, and homeownership is probably going to go down. Both of those things arguably could be a good thing.
Proper economic balance is always a good thing. How long have some of us been preaching that expanding homeownership by force-feeding goofy mortgages on unqualified buyers creates problems, not solutions? In my case, this long.
We need government regulation of banking and lending but not intervention in a dynamic market of buyers, sellers, borrowers, and lenders.
I’m concerned that Barney (Frank) and his buddies will oppose this move but to do so, they will be pushing against a mountain of data showing that Fannie and Freddie bring a lot more trouble than value to the table.
Your thoughts about this development?
(More in this article: Obama Administration Proposes Fannie Mae, Freddie Mac Phaseout)