Fannie Mae and Freddie Mac: If You Can't Kill Them, Merge Them? #realestate #homeownership

Source:  Wall St. Journal

What's the best way to deal with mortgage-finance giants Fannie Mae and Freddie Mac?  A group of housing policy experts has come together to propose in a new report that the entities should be merged into a government-owned corporation that would take over the responsibilities of buying mortgages, wrapping them into securities, and guaranteeing investors against default.  The new government corporation, which the authors call the National Mortgage Reinsurance Corporation, would be required to sell to investors most of the risk that a mortgage defaults, though the government would ultimately guarantee that mortgage bonds got paid on time.  Even if the plan doesn't soon get traction, it is expected to reframe the debate.

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