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The Progressive Fix

Fannie and Freddie’s Fate

In a Letter to the Editor of The New York Times, Jason Gold argues that the Times’ editorial gets it wrong and the Obama administration should act now on Fannie Mae and Freddie Mac:

Your Dec. 2 editorial “The Mortgage Challenge” drew welcome attention to a problem that neither party has done enough to fix. But it misses the mark by urging the Obama administration not to get “sidetracked” by discussions about reprivatizing Fannie Mae and Freddie Mac. That’s bad advice.

It’s been four years since Fannie and Freddie were taken into conservatorship. Until their fate is decided, we won’t see private capital get off the sidelines and back into mortgage lending. We need more first-time homebuyers participating in the market, not just investors snapping up bargain-basement homes.

The essential precondition for graduating Fannie and Freddie from conservatorship was stopping the decline in home prices. Mission accomplished. This should make it easier for Congress to pass long overdue measures for helping underwater homeowners, and to begin reducing Washington’s huge footprint in our housing markets.

Read the letter at The New York Times.


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