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Fannie, Freddie replacement stalled in Senate

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Mortgage Professional America | 12 May 2014, 07:09 AM Agree 0
A plan to wind down Fannie Mae and Freddie Mac appears unlikely to reach the Senate floor now that several key Democrats, including Sen. Elizabeth Warren, have withdrawn their support
  • Alan Brucato | | 12 May 2014, 09:30 AM Agree 0
    You can say you read it here 1st. Fannie and Freddie or some other GSE are not going anywhere. The real estate market would crater without access to long term mortgage backed securities.
  • Jim in Connecticut | | 12 May 2014, 09:47 AM Agree 0
    I think Alan is correct. The only environment in which such a change could be made would be in a strong housing/employment market (if then), not today's on-life-support recovery.
  • A.F. | | 12 May 2014, 09:47 AM Agree 0
    Alan you're 100% right! The GSEs are not going anywhere and it's because the banks themselves don't want them to go anywhere. Does anybody really think that the banks would just sit there quietly if they could be making money in the securitization business again? The problem is that there is nobody to sell this stuff to anymore. The countries and pension funds they swindled leading up to the crash are all broke. Besides, can you imagine the can of worms they would be opening if Fannie and Freddie were to go public? They'd have to show all the skeleton in their closets. All those garbage mortgages that were cleaned off the banks balance sheets are still hidden on the GSEs books.
  • Bob in Boston | | 13 May 2014, 01:51 AM Agree 0
    Alan, i agree with you on all points, except we did not read it here first. The Community Mortgage Lenders of America's White Paper on GSE Reform took this position almost 3 years ago, when the rest of the industry was digging a grave for the GSE's. That group, through Zimmer-Horne-Kibbey-etal have been banging that drum on the Hill, in Committee, and behind closed doors ever since. Nice job. Without the GSE's or a competitive and affordable replacement, community lenders (and especially non-depositories) are out of business.
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