White House: Let's Kill Fannie, Freddie

Obama administration wants to get out of the mortgage market
By Kevin Spak,  Newser Staff
Posted Feb 9, 2011 7:11 AM CST
White House: Let's Kill Fannie, Freddie
In this July 11, 2008 file photo, a sign in front of the Fannie Mae headquarters in Washington is seen.   (AP Photo/Manuel Balce Ceneta, file)

The Obama administration will propose dissolving Fannie Mae and Freddie Mac and reducing the federal government’s role in the mortgage market, sources tell the Wall Street Journal. The White House is set to release three plans for moving forward without the government-owned mortgage giants, which originated nine out of every 10 loans last year. Advancing all three plans might prevent an all-out partisan brawl between conservatives, who blame Fannie and Freddie for the financial crisis, and liberals, who say borrowing costs will skyrocket without government help, according to one former Obama treasury official.

"If you focus on the steps everybody agrees on—here are the 10 things you've got to do—that gives people a chance to unite behind a set of steps," he says. Under one of the three plans, the government would exit the market almost entirely. The others would have the government fill Fannie and Freddie’s role as secondary market backstop, either during periods of market stress or at all times.
(More Fannie Mae stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.