Republicans were planning to privatize Fannie Mae and Freddie Mac, but it may be a different story now that they are going to be in control of the House. Representative Scott Garrett made mention of the fact that some things can be done overnight, but others can’t be. Garrett is the gentleman that was appointed to oversee what changes with Freddie and Fannie. Garrett believes that with the market being in a delicate position, it could be damaging to privatize the mortgage giants so quickly.
To clear up what Fannie and Freddie really do, they buy mortgages from lenders and package them as securities. The securities are sold to investors, but with the losses that these agencies experienced in 2008 it had to be placed under the view of the government. Tax payers are fed up with the constant bail outs and are watching their tax dollars go down the drain because if the bailouts. The financial industry seems to have not corrected itself just yet, and with billions being thrown at it to save it without a turnaround, it makes you wonder how much more will be thrown at it before things change.
-Mayer Dallal
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