Fannie and Freddie Mac Going Away?

The recession of 2008, precipitated by the collapse of the subprime mortgage bubble, may be officially over, but economic growth remains anemic and is producing virtually no job growth. We must stimulate the moribund housing markets. Yet in the past three years, there has been no progress on the housing front, and Washington policymakers seem bereft of ideas for turning things around.

They argue this will eventually lead to getting the government out of the mortgage business.

It’s not clear how increasing fees charged by Fannie and Freddie will encourage the government to wind down these agencies. Moreover, raising mortgage fees in the midst of the worst housing slump since the Great Depression will not stimulate housing or job creation. We need a clear path for eliminating Fannie and Freddie over time.

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