Obama wants new model for Fannie, Freddie

[FBaggins]

Source: Reuters

WASHINGTON (Reuters) - The Obama administration called for "fundamental change" at Fannie Mae and Freddie Mac, but a long, politically explosive debate lies ahead on the future of the bailed-out mortgage finance giants and U.S. housing policy.

U.S. Treasury Secretary Timothy Geithner on Tuesday raised basic questions with housing industry leaders about the U.S. government's long-standing role in subsidizing and supporting the $10.7 trillion housing market.

"It is not tenable to leave in place the system we have today," Geithner said at a conference hosted by the Treasury Department almost two years after the government seized Fannie Mae and Freddie Mac to save them from collapse.



Read more: http://finance.yahoo.com/news/Obama-wants-new-model-for-rb-3108999007.html?x=0&sec=topStories&pos=main&asset=&ccode=

[dipsydoodle]

1. How about Kate Moss. She's a model.

[brentspeak]

2. Strip Fannie and Freddie of their GSA status

It made sense for Fannie and Freddie to be government-sponsored back when they were non-profit, government-run agencies, but that all changed when they became for-profit, privately-run, public companies who have to maximize profit for shareholders.

[w4rma]

3. I would prefer to strip them of their for-profit, privately-run status, instead. Make them back into

what they were intended to be. Don't make them into something worse than they are now.

[No Elephants]

10. +1

[NC_Nurse]

4. I think the idea of having an govt. entity buy mortgages from banks is just

fatally flawed. Banks need to hold their own loans, then they have to do responsible lending. Period.

on edit: I also believe banks should not be allowed to engage in high-stakes gambling, which keeps them so busy trying to make huge profits on non-existent assests that they don't want to do the mortgage lending and small business financing they are supposed to be doing.

[Hassin Bin Sober]

6. If you do away with Fannie and Freddie you will, for the most part, do away with ....

.... long-term fixed rate loans.

Banks can't and won't tie up their depositors money for fifteen or thirty years. That's why most "portfolio" loans made through banks are shorter term arms, home equity lines, balloon loans, etc. Even most credit unions keep the short term portfolio loans - arms, equity lines, credit cards and car loans while selling off the 30/15 year fixed home loans to the agencies (they may keep the servicing piece you see so you may think your CU kept the loan).


Fannie/Freddie provide a conduit to long term money investors that local banks don't typically see.

Un-privatize it. Tighten lending standards to what they were 10 years ago. But don't throw the baby out with the bath-water.

I don't think Americans would like to go to a 3-5 year balloon loan and have to refinance every 3-5 years.

[NC_Nurse]

9. They used to.

[snot]

5. Like so many other gummint efforts, they worked well for decades--until we let 'cons break them.

[Rebubula]

7. Plenty of blame to go around

Freddie\Fannie is not the fault of one party or group.

Blaming everything on the 'cons' or 'pukes' (I prefer the simple 'Dumbass' label myself) is a weak retort.

[w4rma]

8. Well it sure wasn't progressives that broke it. And who does that leave us with? (nt)

[No Elephants]

11. When did Republicans last have 60 Senators?

[w4rma]

14. When were DLCers progressives or anything but DINOs? (nt)

[No Elephants]

12. Please see Reply # 11.

[No Elephants]

13. Oh, goodie. More Timmeh.