What’s the Future of Fannie Mae and Freddie Mac?

The future of Fannie Mae and Freddie Mac is being debated this week at a housing summit in Washington, D.C. Considering that the government-run companies are currently backing a large percentage of loans–9 out of 10 new loans when the Federal Housing Administration is also included according to the Wall Street Journal–the outcome is important to future first-time homebuyers, or those looking for their next home.

Treasury Secretary Timothy Geithner said today that the U.S. government is expected to guarantee mortgages for the near term, though there must be a system in place to prevent another breakdown of Fannie Mae and Freddie Mac. Reports indicate that early next year, President Obama will be revealing a new housing proposal.


About two years, Fannie Mae and Freddie Mac were taken over by the government. WSJ says that a total of $148 billion has been put into the mortgage companies by the federal government since then.
It is unclear how Fannie and Freddie will operate down the road, however many say that the government should no longer be aiding the companies. Geithner is urging a bipartisan solution to rebuild the housing system. Also, policy makers are trying to determine how private capital can enter into the solution moving forward.

- Jill Kipnis, Move Trends Editor