Fannie and Freddie Will Likely Never Return To Private Hands

New York Times:

Despite assurances that the takeover of Fannie Mae and Freddie Mac would be temporary, the giant mortgage companies will most likely never fully return to private hands, lawmakers and company executives are beginning to quietly acknowledge.

The possibility that these companies -- which together touch over half of all mortgages in the United States -- could remain under tight government control is shaping the broader debate over the future of the financial industry. The worry is that if the government cannot or will not extricate itself from Fannie and Freddie, it will face similar problems should it eventually nationalize some large banks.

Read the whole story: New York Times

Comments

[KillTheMessenger]

Nonsense, Americans never ignore a mistake that can be repeated. You will see people crying for and jumping for privatization as soon as the worst of the depression is over.

[MadAppraiser]

“Even if the firms achieve profitability, it could take them as long as 100 years — or longer — to pay back the government. And almost no one expects the companies to return to profitability anytime soon.” This statement from the article concisely summarizes America’s public, and private compounding debt crisis! Is America too big to fail economically, and when does America’s mainstream return to economic solvency considering the current domestic employment scenario???

[EinChicago]

Fannie and Freddie were only in private hands for a short period of time anyway; and that short period of time was something of an unmitigated disaster. I am no fan of teh idea of nationalizing banks (*which would be a disaster in teh long term), but both Fannie and Freddie were always quasi-governmental so let's just make them profit generating state agencies with the profits they generate, as we all know they will again one day, go to the state and help pay down the deficit. A purely private model is doomed to fail due to inevitable greed. A purely governmental model is doomed to fail due to inevitable cronyism and corruption. A hybrid where private banks sell mortgages then the government bundles and securitizes them (using much more regulated and conservative models) is probably the best solution in the long run anyway.

[dadw5boys]

Fannie and Freddie could be transformed to handel the payrolls of the Health Care for Millions of Americans and elminate the 28% to 35 % paid to HMO'S to handel their care and pay their bills for Medicare.

[000Jade000]

Well, we can't keep bailing out un-bailable-out banks, either. If we have to turn towards democratic socialism for a time, so be it. It would be better than our current system of lemon socialism.

[satyriasis]

The state will have a long presence in the financial sector, if not indefinitely.