Big Wall Street Banks Want to Make Fannie Mae and Freddie Mac Go Poof!

Dec. 9, 2015 — The nation’s largest banks have been working behind the scenes to unhorse the mortgage finance giants Fannie Mae and Freddie Mac – and, in the bargain, capture their hefty share of the country’s $5.7 trillion home loan market.

While the banks’ quiet campaign has the support of the Obama administration, according to a report in The New York Times, some housing experts fear that allowing big Wall Street banks to gain greater control of the mortgage market will increase costs for borrowers.  They say it also could hurt smaller lenders and lead to more taxpayer-funded bailouts of banks Washington regards as too big to fail.
Fannie Mae and Freddie Mac, which now back 80 percent of the nation’s mortgages, should not be dissolved, in the opinion of Elise J. Bean, a Senate counsel who oversaw a deep investigation into the causes of the recent financial crisis.
“Fannie and Freddie have their flaws,” Bean told the Times, “but that doesn’t mean the answer is to hand over their business to the banks.”