Will “Freeing” Fannie/Freddie Improve Housing Finance?

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Posted To: MND NewsWire

In a prior article we summarized the options the Trump Administration might utilize to reform the residential mortgage financing system should Congress continue to drop the ball. Two noted economists, Jim Parrott and Mark Zandi, writing for the Urban Institute, address the notion of shrinking Fannie Mae and Freddie Mac’s (the GSEs) footprints and eliminating their cross-subsidy of higher risk borrowers. This article summarizes their alternatives for ending the 10-year government conservatorship of the two companies. The director appointed to replace Melvin Watt when his term as director of the Federal Housing Finance Administration (FHFA) expires next year will undoubtedly reflect the attitudes of the Administration including their claimed commitment to changing the GSEs’ status. The authors…(read more)

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