Will Fannie Mae & Freddie Mac Be Replaced? Law makers are in a heated debated as how to proceed with the mortgage giants Fannie Mae and Freddie Mac. Some are in favor of keeping the entities intact while others are proposing more federal control in the public interest. The 30-year fixed rate mortgage was a trusted standby for many years until the real estate collapse which ultimately resulted in recesssion. Some politicians are in favor of replacing Fannie and Freddie with a mix of private lending and government institutions. Private lending institutions include http://www.loandepot.com/ The propsed bill from Sens. Tim Johnson is expected to lead to lower risk for financial institutions but higher interest rates from borrowers. Other politicians suggest restoring Fannie Mae and Freddie Mac as government sponsored enterprises operating in the public interst. The dismantlement of these two entities may lead to increased federal regulation concerning PMI (private mortgage insurance). Senators Bob Corker (R-Tenn.) and Mark Warner (D-Va.) introduced the Housing Finance Reform and Taxpayer Protection Act of 2013, which would wind down Fannie Mae and Freddie Mac over five years, replacing them with a new government agency, the Federal Mortgage Insurance Corporation ("FMIC"). U.S lawmakers have yet to come to a solution since the federal conservatorship of Fannie and Freddie since 2008.
Will Fannie Mae & Freddie Mac Be Replaced?
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