Year Published
2009
Abstract
Not so long ago, the US housing finance system was arguably the best in the world. Consumers
had access to products that were not available elsewhere, and the market was able to sustain
major economic disruptions with relatively little impact on either the cost or availability of
mortgage credit. Fannie Mae and Freddie Mac (hereafter the GSEs
1) provided the cornerstone
of that system and deserve much of the credit for its success.
But despite their many accomplishments, Fannie Mae and Freddie Mac are now essentially
wards of the state and most policymakers have concluded that the GSE model is effectively dead.
This paper attempts to establish a case for GSE reform that retains a market-driven approach but
addresses acknowledged problems through charter revisions and better regulatio
had access to products that were not available elsewhere, and the market was able to sustain
major economic disruptions with relatively little impact on either the cost or availability of
mortgage credit. Fannie Mae and Freddie Mac (hereafter the GSEs
1) provided the cornerstone
of that system and deserve much of the credit for its success.
But despite their many accomplishments, Fannie Mae and Freddie Mac are now essentially
wards of the state and most policymakers have concluded that the GSE model is effectively dead.
This paper attempts to establish a case for GSE reform that retains a market-driven approach but
addresses acknowledged problems through charter revisions and better regulatio
Research Category
Topics