Obama Set To Outline Fannie Mae and Freddie Mac Overhaul

Expected to endorse plans to make implicit bailouts a thing of the past

WASHINGTON — In another sign that the housing market has strengthened, President Obama on Tuesday will outline his long-awaited ideas for overhauling the mortgage finance giants Fannie Mae and Freddie Mac to significantly reduce the government's risk in any future credit crisis.

In an appearance in Phoenix, Mr. Obama will endorse bipartisan efforts in the Senate to wind down the two companies and end their longtime implicit guarantee of a federal government bailout. That dread prospect, once thought improbable, was realized in the fall 2008 financial crisis; Fannie Mae and Freddie Mac, then bankrupt, were made conservators of the government at great cost to taxpayers, who only now are being repaid.

Comments

[Jose Chung]

"... wind down the two companies and end their longtime implicit guarantee of a federal government bailout."

In their place, a new residential mortgage GSE will be created with an explicit guarantee of a federal government bailout, I'm sure.

[Fist of Etiquette]

I'm supposed to believe they've cycled through all the cronies they need to install in those chairmanships?

[johnson29]

Good post. We do sometimes get people who will ask us if we have heard much about reverse mortgages. It would be of the opinion that any applicant should do their homework very thoroughly as questions that come to mind is if an elder were to pass away, suddenly all hands would be out for funds such as the bank, Medicare, Medicaid, etc., leaving nothing to existing family members left behind.

HECM providers
Reverse Mortgage Misconception