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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26189
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| Title: | Reforming Fannie and Freddie: Privatization is the Way |
| Authors: | White, Lawrence |
| Keywords: | housing finance
mortgages
Fannie Mae
Freddie Mac
government sponsored enterprises |
| Issue Date: | 11-Apr-2002 |
| Series/Report no.: | EC-02-10 |
| Abstract: | Fannie Mae and Freddie Mac are unique and controversial participants in
the housing finance system of the United States. Because of these
enterprises' government charters, the financial markets believe that the
federal government is unlikely to allow Fannie and Freddie to fail to
honor their debt obligations, and they are thereby able to borrow more
cheaply in credit markets; in turn, they lower interest rates for
residential mortgages. If the financial markets are right, however,
Freddie and Fannie also create a contingent liability for the
government. Though there are positive externalities from their
activities, those benefits are modest at best. Recent reforms are steps
in the right direction; but privatization would be a superior policy choice. |
| URI: | http://hdl.handle.net/2451/26189 |
| Appears in Collections: | Economics Working Papers
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