Posted on 01/04/2010 11:17:04 AM PST by FromLori
There's a scary couple of paragraphs in a WaPo editorial today: The Obama administration has promised to roll out its ideas for fixing Fannie and Freddie early this year. Anticipating that, the Center for American Progress (CAP), a liberal think tank with ties to the administration, has proposed new entities called chartered mortgage-backed securities issuers (CMIs): privately owned firms that would package mortgages into securities and sell them with an explicit federal guarantee. Securitization fees would go into an insurance fund to protect taxpayers against defaults. Profits and product lines would be tightly limited by federal regulators
The CAP proposal grapples with the fundamental problem of the old Fannie and Freddie: An implicit government guarantee permitted them cheap access to borrowed funds, which they gambled in pursuit of maximum returns to shareholders. It also wisely emphasizes that the new organizations must help rebalance federal support between rental housing and single-family homes. However, the CAP proposal would leave the new companies under political pressure to meet difficult-to-define "public purposes," such as funneling liquidity to "under-served" geographical areas. This seems not only risky but redundant, given the Federal Housing Administration's support for homebuyers of modest means.
A public-utility model for replacing Fannie and Freddie is plausible. The last thing the government distorted housing finance market needs is more government controls and distortions. But that looks as though exactly where things are headed. CAP's proposal seems to be nothing but Karl Marx's call in his 1875 Critique of the Gotha Program:"From each according to his ability, to each according to his need."
Under Obama and Rahm Emanuel the CAP proposal will be further twisted to make sure Goldman Sachs and the like do get to keep their fees, and don't be surprised if houses built by union workers suddenly become the houses of choice that are financed out of CAP program.
Scary.
They nationalized it last year. Didn’t you guys get the memo?
More nationalizing could be the straw that broke the Democrats back!
Podesta ... the Chicago Way!
we are going to be fannie, freddie, franked to death
So the party primarily responsible for breaking it, is going to fix it?
F is the sixth letter of the alphabet.
666
Fannie and Freddie will be nationalized. ...Not sure what the difference will be. Is it like getting ACORNized?
Isn’t it clear right now that Fannie and Freddie are already being “Nationalized” with the lifting of the cap by Treasury?? I mean, what else could they possibly do to make either one more nationalized??
How would this be different from FHA?
666.....scary
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