The Obama administration
recently called for an orderly
transition from the current form
of the Fannie Mae and Freddie
Mac secondary mortgage market
to a new structure that would
allow home buyers continued
access to affordable, sustainable
mortgages.
Without functioning mortgage
markets, people cannot buy or
sell homes. To ensure a smooth
transition, it’s important that any
new system involve some
government backing, ensuring a
continued flow of capital to
housing markets during
economic downturns. This
government support provides a
safety net in case private capital
flees the market, as it did during
the recent downturn.
Reducing government
involvement in the mortgage
finance market is essential to
keep the market healthy, but
shouldn’t be done at the expense
of the economy or home buyers.
