Week 3 - chairman of the Financial Services Committee, says...

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Jamie Riedford BTE 234 November 17, 2010 “Fannie and Freddie Face Uncertain Future” This article in The New York Times discusses the different viewpoints on the future of both Fannie Mae and Freddie Mac. Since the Republicans’ recent takeover of the House, they are promising to end the government’s long-time use of Fannie Mae and Freddie Mac in order to reduce the cost of mortgage loans. The current law requires the government to completely end its support for these two companies by the end of 2012. Republicans have made it clear that they are in favor of getting rid of the companies and allowing nothing to take their place. Democrats, on the other hand, do not mind them because they feel they are serving their purpose by making sure that families get mortgage loans. If Fannie Mae and Freddie Mac were to stay, government ownership means that they are not allowed to chase after profits, which is what previously got them in trouble. Republican representative Spencer Bachus, who is like to be the future
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Unformatted text preview: chairman of the Financial Services Committee, says its necessary to shut down these companies, even if its painful for borrowers. He explains how there is an addiction to government funding, and the only way to end it is to start eliminating companies such as Fannie Mae and Freddie Mac. I agree with this explanation and support the termination of these companies, because Bachus is correct, we have to start somewhere. By continuing to support these companies and their purpose, we are driving our economy into a much worse-off place in the future. Where most want to put an end to the two companies, the Obama administration wants to replace them with some new form of federal subsidy. After suggesting this idea, the administration is required to present Congress with a proposal by January. Their plan involves a much-discussed possibility of a new form of government insurance, which will include lenders paying the government to absorb catastrophic losses....
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