Again, Fannie Mae and Freddie Mac are Private/Public partnerships and have been for decades. The Private Financial Sector has used these agencies as a backstop for mortgage fraud as part of their business model. It is so disingenuous to say more Private Sector control of the mortgage industry would improve the current situation. What eliminating government from the mortgage industry would do, in a completely deregulated environment, would be to increase the potential for even more dangerous financial frauds, that threaten our economy, to occur, not lessen them.
In San Francisco in 1980 it was still possible to find a house for around 150K, which was still a house a buyer could actually wind up paying off and owning at some point. In 2007, the same house was selling in the neighborhood of 650K. With wage increases being stagnant for thirty years, what home "buyers" were looking at was a long term lease on their property, not a path to actual ownership.
As we know, the Banks were ginning up the mortgage process, through Fannie and Freddie, to create mortgages to convert to securities for the derivatives game that crashed in 2008. Freddie and Fannie became facilitators of the Financial Sectors Ponzi, not a tool to enhance opportunities of citizens to become homeowners.
This is just another example of the Private Sector scapegoating the Government for its own failure.
Read the Article at HuffingtonPost
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