Senate lawmakers debate Fannie, Freddie

TRD MIAMI /
Sep.September 13, 2011 05:38 PM

Top Senate lawmakers got down to business today over how to wind down government-sponsored mortgage enterprises Fannie Mae and Freddie Mac, Reuters reported. While both Democrats and Republicans agree that the government needs to get out of the mortgage business, they differ over whether it should maintain a role in subsidizing housing financing.

“I am concerned about the unintended consequences for our housing market and economy that could result if a government role is eliminated completely,” said Tim Johnson, the Senate Banking Committee chairman and a South Dakota Democrat, commenting that record low mortgage rates, which currently hover around 4 percent, would likely skyrocket if the government pulled out suddenly.

At the moment, mortgage rates are continuing to sink to new depths, seemingly shattering previous lows every week. In the week ending Sept. 8, the 30-year and 15-year fixed-rate mortgages were at all-time lows, according to the Primary Mortgage Market Survey released today by Freddie Mac.

Still, Fannie and Freddie continue to hemorrhage tax-payer dollars. The firms have already used up $170 billion since they were placed under government control in 2008, Reuters said.

“We need a private system to enable institutional investors,” Peter Wallison, a fellow with the conservative American Enterprise Institute, advised the committee. “We are forcing the taxpayers to take the risk the government is taking.” [Reuters]


Related Articles

arrow_forward_ios
Daily Digest Miami

Related is heading to the river, Soffer eyes Fontainebleau Miami Beach expansion: Daily digest

Related is heading to the river, Soffer eyes Fontainebleau Miami Beach expansion: Daily digest
Fannie Mae CEO Hugh R. Frater, and Freddie Mac CEO Donald H. Layton

Fannie Mae and Freddie Mac financing riskier mortgages to indebted homeowners

Fannie Mae and Freddie Mac financing riskier mortgages to indebted homeowners
Home buyers in front of a house (Credit: iStock)

Lenders opening doors to a wider swath of home buyers

Lenders opening doors to a wider swath of home buyers
Brickell Flatiron scores Fannie Mae approval and lowers deposits

Brickell Flatiron scores Fannie Mae approval and lowers deposits

Brickell Flatiron scores Fannie Mae approval and lowers deposits
Mortgage giant Freddie Mac names new CEO amid privatization talks

Mortgage giant Freddie Mac names new CEO amid privatization talks

Mortgage giant Freddie Mac names new CEO amid privatization talks
Buying a home just got easier for many in the gig economy

Buying a home just got easier for many in the gig economy

Buying a home just got easier for many in the gig economy
Private investors are buying more mortgage loans and reselling them as bonds

Private investors are buying more mortgage loans and reselling them as bonds

Private investors are buying more mortgage loans and reselling them as bonds
More Americans are paying mortgages on time

More Americans are paying mortgages on time

More Americans are paying mortgages on time
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...