A quick bye-bye to Fannie and Freddie? Don’t bank on it.
With the sudden gush of congressional proposals designed to kill the two government-sponsored companies as fast as possible — the most recent floated at the end of last week by a key committee leader in the House — you’d think Fannie’s and Freddie’s days are numbered.
In the long run they probably are, but a close look at legislative plans such as the “PATH Act” (Protecting American Taxpayers and Homeowners Act) offered Friday by House Financial Services Committee Chairman Rep. Jeb Hensarling (R-Texas) tells me that Fannie and Freddie are going to be around for years — maybe into the next decade, beyond 2020.
Depending on how you see their current and past roles supplying the bulk of funds for home mortgages along with FHA, that’s either good news or terrible news.
Here’s how I see it.
Fannie and Freddie have been in “conservatorship” — which was designed to be a short-term legal purgatory allowing the White House and Congress time to figure out what to do with both companies — for nearly five years. Despite a bold-sounding commitment by the Obama administration in early 2011 to work with Congress to return housing finance primarily to the private sector and out of the grips of federally chartered Fannie and Freddie, 2013 has been the first year we’ve seen a serious proposal for how to do that.
– See more at: http://www.inman.com/2013/07/16/talk-of-doing-away-with-fannie-and-freddie-is-just-that/#sthash.sDJFtI8F.dpuf