BerkeleyBob

Should Fannie and Freddie Be Buying or Guaranteeing Investor Mortgages at All?

Interesting, I had no idea that up to 40% of housing is investor owned. I do think some fundamental changes need to be made in Fannie & Freddie. There is an inherent conflict in their status as a GSE and the duty of management to maximize shareholder return. I bailed on my position in Freddie long ago, did not panic at the accounting irregularity. I do not understand the hypocrisy of shills for the private sector who claimed Freddie and Fannie were unfair competition and continue to act as if the CRA was a dirty word (socialism). The policy goal of expanding home ownership is worthwhile but not at the cost of poor underwriting and bad appraisals or the destruction of America's fiscal reputation by exporting rating agency blessed fraudulent loans. The source of the bubble's collapse was not the GSE's it was in the private sector. In the present crisis, the kind of dispassionate analysis needed to reconfigure the secondary market in mortgages is going to be hard to find.