7 out of 10 U.S. homeowners have their mortgages backed by Fannie Mae or Freddie Mac. Housing market reformers say it's time to get rid of them. But how?
Bye bye Fannie and Freddie? We need “a whole series of banks, community banks and credit unions playing key roles and the government staying way back,” said Henry Cisneros, former HUD Secretary under President Clinton Monday.
Along with former HUD Secretary and ex-Republican Florida Senator, Mel Martinez, the two men told The Daily Rundown‘s Chuck Todd that the government-backed mortgage giants need to be eliminated so that the private sector can take a leading role in the housing market once again.
It’s the subject of a new report from Cisneros and Martinez, who are co-chairing the Bipartisan Policy Center’s Housing Commission. The two agencies, which fell under Treasury control in 2008, currently back nearly 70% of all private mortgages in the U.S, a position the Center’s Housing Commission says is “unsustainable.”
“We need to move to a new system,” says Martinez. “And do it in a way that ensures that government comes in in the last place.” Over the next five to ten years, the two men say the plan is to limit the government role by limiting how much Fannie and Freddie can lend.
