Part of the debate over the future of the government-sponsored enterprises is whether the existing cross subsidization in Fannie Mae and Freddie Mac pricing of guarantee fees for mortgage-backed securities should continue.
The judges opined: "Indeed, the GSEs lost more in 2008 ($108 billion) than they had earned in the previous thirty-seven years combined ($95 billion). Yet the GSEs remained solvent.”
Fannie Mae this week released details about a pilot program that explores an alternative to how private mortgage insurance is placed on loans the government-sponsored enterprise acquires.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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