The future of mortgage giants Fannie Mae and Freddie Mac is still uncertain considering the lack of attention it received during the presidential elections.
Many critics are disappointed with the lack of attention, and doubt that they will see any kind of reform in this administration, according to an article by Matthew Goldstein for The New York Times.
From the article:
There is a growing sense among housing policy experts that it may take another crisis — a recession or more big losses at the mortgage giants — to get the new president and Congress to come up with a more permanent way to handle the responsibilities now shouldered by Fannie and Freddie. Until then, it is very likely that both agencies will go on in a state of limbo: run by their own management teams, but with strict oversight by the relatively new Federal Housing Finance Agency.
While some plans have been proposed for the two mortgage giants, none of them gained support from legislators, according to the article.
What are some of those proposed changes? It seems there are many different opinions about what exactly should be done. Many agree, though, that something must be done.
From the article:
Some favor merging Fannie and Freddie into a single entity, while others want to turn them into a government-run housing finance corporation — a mortgage finance utility of sorts. Others want to replace them with a number of smaller independent firms that will guarantee mortgages against default and maintain hefty regulatory oversight.
And still others, mainly investors owning shares in Fannie and Freddie, want to see them recapitalized, set free and returned to the public markets as independent companies with minimal government control.