The Big Mortgage Reform Debate

The Big Mortgage Reform Debate Freddie Mae and Fannie Mac have been backers of residential home loans in the decades until 2008 when the two entities were placed under federal conservatorship after the housing market collapse. Law makers are still divided... More

The Big Mortgage Reform Debate Freddie Mae and Fannie Mac have been backers of residential home loans in the decades until 2008 when the two entities were placed under federal conservatorship after the housing market collapse. Law makers are still divided as to how to proceed next. 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 ins Less