Despite having been the recipient of hundreds of billions of dollars of taxpayer money in the wake of the financial crisis and likely being subject to far more, FnMae, FrMac & the FHA are still backing over 95% of new mortgages. This is a scary statistic.
Due to their sheer size, we can't expect to immediately halt all taxpayer subsidization of new mortgages. That would grind the housing market to a halt, elminate the possibility of a market bounce-back and likely lead to even more foreclosures. The trick is to wind down the GSEs' involvement in the housing market strictly, responsibly and in a timely fashion.
There are rumors, for example, that the GSEs will be exempted from having to take a 5% stake in investments that they back. This would be a terrible mistake. Yes, the 5% provision would lead to more expensive mortgages with bigger down- and interest-payments on the part of homebuyers, but the way to a recovered housing market is not through another irresponsible bubble.
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