Question Details

Scott Miller, Real Estate Pro in 33432

Is the Obama government going to bail out Fannie Mae in the end and resurrect them to pre-meltdown status? Or are they going to continue to .....

Asked by Scott Miller, 33432 Wed Jun 26, 2013

threaten to break them up and force them to go private? Not sure having them go private is a good idea. Look how bank fraud brought on the greatest recession we ever had in the US.

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Hi Suz. Keep in mind that JP Morgan, B of A, Lehman, Citi, AIG, GS, Ford, and tens of others of companies 'made bad decisions', too. They were all bailed out by the US Gov't. If and when they repay the US loans made to them, they go back to being private or semi-private entities. It should be the same with FNMA, in my opinion. Fannie now has an excellent CEO, they've learned from their mistakes, and are extremely profitable showing enormous numbers.

At this point in history, what other company, companies or entities want to take the place of FNMA? None. Nobody will step up to the plate and if banks are willing to guarantee mortgages like FNMA does, what happens during the next meltdown? As long as we give the banksters a lifeline against 'too big to fail', we have no future. As long as we guarantee bad behavior, incompetent business decisions, and rampant fraud, we are destined to boom/bust forever.

I think FNMA should be watched, but they need to continue to guarantee most of the mortgages written in the US.

Scott Miller
Realty Associates
Boca Raton, Miami Beach
0 votes Thank Flag Link Wed Jun 26, 2013
If Fannie and Freddie do depart, it will be as profitable Government Supported Enterprises. There may be other thoughts on why these companies ultimately made the bad decisions that led them to be bailed out. I recall Congressional pressure to lend to un-creditworthy borrowers had a hand. Remember, the cure for the economy had the current administration get into business with the people who were responsible for making the mess. That is concerning. Recent government involvement in business is unprecedented. History has been kind in its portrayal of massive government involvement. The transcontinental railroad had strategic value so it was bound to happen. Is there some compelling reason to continue supporting enterprises that end up taking riskier loans? What is at stake is widespread ownership by the middle class. I hope the question of mothballing these two GSEs is given ample consideration.
0 votes Thank Flag Link Wed Jun 26, 2013
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