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Eliminating Fannie, Freddie would save government billions -- report

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Mortgage Professional America | 08 Sep 2014, 10:53 AM Agree 0
Eliminating Fannie Mae and Freddie Mac in favor of a new government mortgage insurer would reduce spending by billions over the next 10 years, according to new data from the Congressional Budget Office
  • cheryl m | | 08 Sep 2014, 11:09 AM Agree 1
    Bob Corker should put a cork in about what you know not what you don't. Here's a clear example
  • Edward | | 08 Sep 2014, 11:13 AM Agree 0
    Eliminating Fannie Mae and Freddie Mac will increase the cost and the rate for consumers who are qualified and have strong credit. I have not seen anything done right by the government!! Right now the Treasury is profiting from Fannie and Freddie in billions and they are not costing the government anything! I wonder sometimes about this so called people who provide the data??
  • John | | 08 Sep 2014, 11:47 AM Agree 1
    This report was cleverly designed to exploit CBO's propensity to count guarantees as expenses. They are only expenses if the guarantee is executed. The CBO erroneously predicted in 2011 that Fannie Mae would cost $187 billion above the $130 billion the government provided. Instead, Fannie Mae repaid the $130 billion and more. Supposedly, the Corker proposal will not have losses so fees will cover the guarantees. This is the supposed $58 billion that would be saved. Meanwhile, mortgages will cost about 1.5% more in rate costing consumers several hundred billion dollars.
  • Dfsammarone | | 08 Sep 2014, 12:00 PM Agree 0
    Where do I sign?
  • guy schwartz | | 08 Sep 2014, 12:01 PM Agree 1
    Replace FNMA and Freddie with what?
    No one has a practical answer to this question.
    Creating a void in home financing will cause a depression.
  • Roy | | 08 Sep 2014, 12:02 PM Agree 0
    Its part of an ongoing flurry of bills, articles, and assorted headfakes, to distract from the fact that the government has been stealing the profits. Their hoping the eliminating the GSE's will also bury the evidence of the heist/scheme.
  • Perfparjer | | 08 Sep 2014, 12:19 PM Agree 0
    $5.8 Billion dollars per year in savings????? Just chump change. If it was a $58 Billion dollar per year savings, rather than over 10 years, it may be meaningful, but leave it to Corker, while scheming with a Democrat, to try and hide the minimal savings by using a 10 year amortization.
  • | | 08 Sep 2014, 01:06 PM Agree 1
    Why must this area of private enterprise continue to be subsidized?
    I laugh at the response from readers who claim to be capitalists who recognize and comply with "market value," yet apply their allegiance to a socialist program.
  • junior | | 08 Sep 2014, 01:06 PM Agree 0
    Where do they come up with this stuff? They have been collecting dividends for years, where's that money? During the tarp bailout they recieved dividends and tarp was repaid. Where is that money? There is already a government sponsored mortgage entity called FHA. To get rid of Fannie and Freddie would just raise the costs to consumers...again.
  • | | 08 Sep 2014, 03:13 PM Agree 1
    I have to wonder if a new government mortgage insuror would add cost to the budget similar to the CFPB. That's been a real bargain so far, hasn't it? Did the CBO predict those exhorbitant expenses???
  • George | | 09 Sep 2014, 10:05 AM Agree 0
    Good question. What will the cost of the replacement be?
  • | | 09 Sep 2014, 10:19 AM Agree 1
    Okay, the report's conclusions require scrutiny. The government (aka taxpayers) should not be insuring investments for banks and wealthy investors. However, Fannie and Freddie are proven vehicles for enhancing mortgage credit. The government simply can't fix things without being twisted by special interests. Remove the government guarantee and let Fannie and Freddie rock on. Don't re invent the wheel in cumbersome costly ways. The market will price the risk, investors will be leery of over committing to housing and we may live happily ever after (not). In any event, taxpayers will not have to absorb the losses of the investment community. The real estate collapse was over in 2009. That horse is out of the barn. Legislative cures 5 years after the fact are a joke, really just an excuse to raise political contributions and afford the most effective lobbyists a chance to seriously wound their competition. What is needed is greater transparency in government! Lets move on.
  • Micki | | 10 Sep 2014, 05:05 PM Agree 0
    Fannie and Freedie were not the cause of the down turn. It was greed on the lenders part, others played a part. The 80 /20 mortgage was the worse mortgage for Freedie and Fannie because people were borrowing their down payment. So no skin in the game. Also no PMI, which was our safety net if people walked away from there homes.
    If we change everything up. We will be walking away from a great system. Not perfect.
  • Bob | | 29 Sep 2014, 11:45 AM Agree 0
    The Govt. has been repaid entirely. In addition they are getting all of the income of Fannie/Freddie going forward
    they also own 80% of the stock . so if they close it down they also take a loss. so how is this a gain for the taxpayer?
    The private sector banks want to get into the secondary market in order to make fees. The New York Fed protected the
    banks Goldman etc. and the taxpayer took the losses Are we going to go down this road again?
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