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Number of the Week: Government’s Overwhelming Role in Mortgages
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The share of new mortgage loans backed by the US government through Fannie Mae and Freddie Mac is at 92%. This makes the fast overhaul of the two agencies much more difficult. Treasury Secretary Geithner said last week that overhaul of the two agencies could take 5 to 7 years. The problems with Fannie and Freddie are real. The U.S. government subsidizes mortgages through Fannie and Freddie, encouraging Americans to take on more debt. Their balance sheets pose serious risks in another crisis, as long term investments are financed with short term borrowing. Any losses will be the responsibility of the US government. A recent paper from the US Treasury outlined some of the steps needed to wind down both agencies and to reform the way they operated including- requiring larger down payments and lowering loan limits, and increasing the fees charged for the government's guarantees to be more in line with the risk being taken. Slower reform in this area means additional systemic risks in the event of another crisis.
Fannie and Freddie in 2010-2011
06/19/2010
The growing US governmet liability for Fannie and Freddie -companies that fueled the housing bubble with their implicit governmet guarantees to investors in housing mortgages. The cost of rescue has reached $146 billion and according to the Congressional Budget Office could have eventual cost of $389 billion.
Grouped Articles
Fannie Mae and Freddie Mac: Unfinished business
Economist 07/24/2010
Cost of Fannie And Freddie Keeps Rising
New York Times 06/19/2010
Fannie, Freddie Elicit Grim Forecast
Wall Street Journal 10/22/2010
What Fannie and Freddie Might Cost the Taxpayers
New York Times 10/21/2010
Wall Street Journal 10/26/2010
New York Times 10/31/2010
The need to move government away from housing for a better allocation of resources in the U.S. economy
02/09/2011
Grouped Articles
White House Plans to Revamp Mortgage Market
Wall Street Journal 02/09/2011
Fannie, Freddie Phaseout Proposed
Wall Street Journal 02/11/2011
Obama Can't Fix Housing Without a 30-Year War
Wall Street Journal 02/11/2011
Number of the Week: Government’s Overwhelming Role in Mortgages
Wall Street Journal 02/12/2011
Planning a Better Way Than Fannie and Freddie
New York Times 02/12/2011
Wall Street Journal 02/14/2011
The total cost to US taxpayers for Fannie and Freddie.
01/12/2009
The total cost could be $658 billion, according to a Standard and Poor's estimate in late 2010. And prove very costly for taxpayers in the USA. The government put the agencies in conservatorship during the housing crisis of 2008.
Grouped Articles
New York Times 04/13/2013
Freddie's Profit Soars on Housing Rebound
Wall Street Journal 05/08/2013
Fannie Mae to pay $59.4B to Treasury - The Washington Post
Washington Post 05/09/2013
Fannie Chief: Payout Must Not Delay Revamp
Wall Street Journal 05/10/2013
Fannie, Freddie Payments Nearly Match Aid
Wall Street Journal 11/08/2013
White House Rejects Fannie-Freddie Recapitalization Plans
Wall Street Journal 11/23/2013
Nouriel Roubini on large housing losses for the U.S. economy in 2011-2012
12/07/2010
Estimates of $1 trillion in housing losses spread over banks, Fannie and Freddie, as a new wave of foreclosures hits the U.S. economy.
Grouped Articles
A Toxic Subprime Mortgage Bond's Legacy Lives On
Wall Street Journal 09/13/2013
Dr Doom Predicts Another $1 Trillion in Housing Losses in 2011
New York Times 12/07/2010
Wall Street Journal 12/29/2010
Housing Market Is Still Facing a Blizzard
Wall Street Journal 12/29/2010
Rise in Rates Is Headwind for Housing
Wall Street Journal 02/10/2011
Number of the Week: Government’s Overwhelming Role in Mortgages
Wall Street Journal 02/12/2011
The Obama administration's plan to phase out Fannie Mae and Freddie Mac
02/11/2011
Grouped Articles
Fannie Chief: Payout Must Not Delay Revamp
Wall Street Journal 05/10/2013
The Housing Market Is Still Missing a Backbone
New York Times 08/10/2013
White House Rejects Fannie-Freddie Recapitalization Plans
Wall Street Journal 11/23/2013
Plan for Mortgage Giants Takes Shape
Wall Street Journal 03/12/2014
Putting the Hit on Fannie, Freddie
Wall Street Journal 03/12/2014
Senators Draft Housing Finance Overhaul
New York Times 03/11/2014
Winding down U.S. housing agencies Fannie and Freddie- the U.S. Treasury report of 2011 (2)
02/12/2011
Linked Articles
Wall Street Journal 02/14/2011
Number of the Week: Government’s Overwhelming Role in Mortgages
Wall Street Journal 02/12/2011
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