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Fannie and Freddie: The End of Conservatorship

Hello Hampton Roads,

I read an intersting article about a talk that Mark Calabria, the Director of the FHFA gave to the MBA (Mortgage Bankers Association) a little more that a week ago that advocates moving Fannie Mae and Freddie Mac out of government conservatorship. As many of you remember, back in Sept. 2008, these 2 GSEs were placed under conservatorship and given about $200 billion  to stay solvent (this wasnt a gift, they've paid this money back and more) and help prevent further de-stabilization of the housing market.  Both entities are now turning a profit and with more than 10 years of conservatorship, what started as a temporary solution is turning out to be more long term than anticpated.

What are the roles of Fannie and Freddie?  They purchase loans from lenders and package those loans into MBS (Morgage Backed Securities) guarantee the payment and sell them to investors.  Since the banks/lenders can sell their loans to Fannie and Freddie, they have more money avail…

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