What to do about Fannie Mae and Freddie Mac is still a major topic of discussion and negotiation in Washington D.C. Options are still being considered. The Obama administration is working with Congress. We don’t know yet which reform option will get selected. No one option has received majority support as yet.
Reuters reports: Fannie Mae and Freddie Mac, which buy mortgages from lenders and repackage them as securities from investors, were seized by the government in September 2008 as losses on mortgages they held mounted. The firms subsidize nearly nine out of 10 of all mortgages.
Since the Obama administration outlined ideas for restructuring the housing finance system, a handful of bills aimed at scaling back the government’s role and getting the private sector more involved in the secondary mortgage market have been introduced in the House.
However, no bills have been introduced in the Senate and the prospects for quick action appear slim.