Thomas J. Gordon

Fannie and Freddie Are Largely Responsible for the Housing Bubble

Suni, you are on to something! There have been academic studies of where the benefits of the GSE's go. The conforming mortgage borrower gets 30 to 40 basis points of mortgage benefit (hardly seems worthwhile for that, just let the private sector do it). The rest goes (went) to the shareholders and the employees as you have mentioned above. Speaking of the management, it's ironic that they let the leverage/situation get so out of hand. They had cushy jobs making very good money and some people are saying if the treasury/the fed steps in, the shareholders get 0 and there will be new management that works for the government. ... Flash