The Boston Globe has an interesting editorial entitled: Scale Fannie and Freddie down – but don’t do so just yet
Here are the main excerpts from the real estate editorial:
Over time, Fannie and Freddie should cease to exist, at least in their current form, but the trick is to make them fade away only slowly. The two entities are so deeply entrenched in the nation’s real estate market that abruptly privatizing them could help cast a slowly recovering economy back into recession.
…For now, some government backing for plain vanilla mortgages seems inescapable. Once a healthy economic recovery is in place, it may become much less hazardous to develop a housing-finance system that’s freer from government influence.
[Update: Fannie Mae is asking for another $2.5 billion from the government after another string of losses this past quarter. This now brings the total bailout of Fannie Mae and Freddie Mac to around $133.4 billion, but the total cost of the bailout is estimated to be around $259 billion.]
