Dodd-Frank Act
Posted at 7:52am on Jul. 11, 2008 Rethinking the Goals of a National Mortgage Bailout
An already-ugly problem gets worse
By blackhedd
Front and center this week have been the ill fortunes of Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that together own trillions of dollars’ worth of US home mortgages.
At this point in time, there really is no reason to own the stock of either company. The Administration is said to be looking carefully at whether and how to do a government takeover of one or both. The grand 35-plus year experiment in semi-public support for US housing may be coming to an end.
But that’s far from the only problem in the mortgage/housing sector. In fact, it may be the easy problem. The hard problem is what to do about all the homeowners that are falling behind on their payments.
This is a time bomb that continues to tick away, and Congress has been working hard to pass a huge bailout bill (the Dodd-Frank Act). President Bush has vowed to veto it, but he’ll break that promise.
But what are the objectives (both political and economic) of this enormously costly legislation? Can it actually meet those objectives? And are they the right objectives in the first place?
Keep reading.
Posted in Dodd-Frank Act | Economy | housing | Mortgage Bailout — Comments (45)/ Email this page » / Read More »
