They have helped create and maintain a vibrant U.S. Real Estate Market. Their fault was they strayed from responsible lending practices. That’s a common mistake of every government enterprise. They tend to do things that make no financial sense.
Maybe we should get rid of them.
President Obama is trying to solve the wrong problem by calling, as he did in his speech in Phoenix, for the end of Fannie Mae and Freddie Mac as we know it. To be sure, Fannie and Freddie were not the hallmarks of responsibility in the mortgage meltdown, but have gotten a bad rap. For all their housing expertise, they missed all the signals of the housing bubble (but then again so did Federal Reserve chairman Alan Greenspan and his successor Ben S. Bernanke who dismissed it when the first signs of the meltdown emerged). Instead of suggesting replacing Fannie and Freddie to restore the nation's housing markets, the president should be proposing to return them to their original charters. » Read More
- Sunil Sethi
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