REALTOR® Magazine-Daily News-Mortgage Bankers: End Fannie and Freddie

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Daily Real Estate News | September 3, 2009 | Mortgage Bankers: End Fannie and Freddie
The Mortgage Bankers Association is urging the U.S. government to replace Fannie Mae and Freddie Mac with private companies.

The Obama administration is considering a couple of options, including shutting them down or merging them into another federal agency.

The mortgage bankers would replace Fannie and Freddie with federally regulated private companies that would buy loans, sell them as bonds with their own guarantee, and pay the government for reinsurance.

Jaret Seiberg, an analyst at Washington Research Group, said in a research note that the "odds are high for enactment" for the Mortgage Bankers Association's proposal because this would create a practical way to keep mortgage rates low.

Source: The Associated Press, Alan Zibel (09/02/2009)