The proposal is being taken into consideration by the Obama administration. They are considering two options regarding the future of the two lending giants. Both include either closing them either down or merging the two into one federal agency.
In one proposal, the mortgage bankers would replace both Freddie Mac and Fannie Mae with private companies which would be federally regulated. These companies would buy loans and in turn, sell them as guaranteed bonds. The government would then be paid for reinsurance of the bonds.
One analyst for the Washington Research Group, Jaret Seiberg, feels that the odds are good that the MBA's proposal will enacted as it would in turn create a practical method to keeping mortgage rates down.
|
