White House Leaks On Fannie, Freddie Restructuring (WSJ)
New fees on mortgage lenders, but an implicit government (taxpayer) guarantee will remain. Not too surprising given the crowd in charge in Washington. The answer is simple -- get the government far, far away from housing. The ridiculous government housing subsidy must end, and that includes the tax deduction for mortgage interest. And I say that as a mortgage holder myself. Renters get screwed 5 ways to Sunday, and it's time to level the perverse incentives.
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The Obama administration may propose that any federal backing of mortgages be paid for through fees on the lending industry, according to people familiar with the internal discussions.
While the administration hasn't settled on a plan to revamp failed mortgage giants Fannie Mae and Freddie Mac, which are now under federal supervision, a consensus appears to be emerging that some type of government guarantee will be needed to keep the ailing mortgage market functioning.
Some conservatives don't believe the government should offer any type of guarantee, while others advocate limited, but explicit, backing. About nine in 10 new loans are currently backed by Fannie, or Freddie.
Aug 24, 2010 at 1:35 PM