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Don't Kill Fannie Mae
Don’t Kill Fannie Mae
By JOE NOCERA
Published: August 12, 2013 18 Comments
Could it get any worse for Fannie Mae and Freddie Mac? Last week, even President Obama joined the growing chorus of those who want to put them out of business.
He did so in a speech in Phoenix, outlining — at long last — his ideas for reshaping the country’s housing finance system. He called for the housing finance market to be primarily driven by private capital, with a “limited” federal role. He said that the 30-year fixed-rate mortgage should remain a mainstay of the mortgage market. And he essentially endorsed a recent bipartisan Senate bill — a complex piece of legislation that calls for winding down Fannie and Freddie over five years.
Let’s just call this what it is: capitulation. Every since the financial crisis, Republicans have insisted that Fannie and Freddie — private companies that also have a government role, and that guarantee and securitize mortgages — were the root problem. According to their theory, the two companies drove the country off the subprime cliff, primarily because of their federal mandate to help make it possible for low-income borrowers to own homes.
The truth is pretty much the opposite. When the banks first jumped into subprime mortgages, Fannie and Freddie hung back. Only after they began losing significant market share did Fannie and Freddie decide, belatedly, to get into the game. Because they were so thinly capitalized, they had almost no cushion when the losses began to pile up.
more...
http://www.nytimes.com/2013/08/13/opinion/nocera-dont-kill-fannie-mae.html?_r=0
By JOE NOCERA
Published: August 12, 2013 18 Comments
Could it get any worse for Fannie Mae and Freddie Mac? Last week, even President Obama joined the growing chorus of those who want to put them out of business.
He did so in a speech in Phoenix, outlining — at long last — his ideas for reshaping the country’s housing finance system. He called for the housing finance market to be primarily driven by private capital, with a “limited” federal role. He said that the 30-year fixed-rate mortgage should remain a mainstay of the mortgage market. And he essentially endorsed a recent bipartisan Senate bill — a complex piece of legislation that calls for winding down Fannie and Freddie over five years.
Let’s just call this what it is: capitulation. Every since the financial crisis, Republicans have insisted that Fannie and Freddie — private companies that also have a government role, and that guarantee and securitize mortgages — were the root problem. According to their theory, the two companies drove the country off the subprime cliff, primarily because of their federal mandate to help make it possible for low-income borrowers to own homes.
The truth is pretty much the opposite. When the banks first jumped into subprime mortgages, Fannie and Freddie hung back. Only after they began losing significant market share did Fannie and Freddie decide, belatedly, to get into the game. Because they were so thinly capitalized, they had almost no cushion when the losses began to pile up.
more...
http://www.nytimes.com/2013/08/13/opinion/nocera-dont-kill-fannie-mae.html?_r=0
9 replies
= new reply since forum marked as read
= new reply since forum marked as read
You shouldn't notice anything different.
On a side note, if you have had your current loan for 15 years, and it started as a 30 year...you would be crazy not to refinance into a 15yr fixed based off today's rates....as you would be donating free $$$ to your bank 
