Fannie Mae-No Politics (FNMA)

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Banks want Fannie & Freddie profits and Gov is more than willing to oblige. Bank lobbyists are among the more powerful in Washington and are in many cases top campaign contributors to many politicians.

https://www.opensecrets.org/politicians/contrib.php?cycle=2014&cid=N00002097&type=I

Fannie and Freddie have never closed or even slowed operations during the worst of the mortgage meltdown. They function day in and day out, relentlessly, and at minimal cost to the public. Fannie, has enabled borrowers since 2009 to complete 12.3 million refinances, 3.7 million purchases, and financing for 2.2 million units of multifamily housing. During the same period, Freddie did 7.7 million refinances, originated 2 million purchase money mortgages and helped finance 1.6 million multifamily units.

Given such success what is the point of replacing Fannie and Freddie? Will taxpayer guarantees end? Will mortgage costs decline?

Here’s one answer: A just-released study by the Federal Reserve Bank of New York found that the five largest banks had a cost-of-funds advantage of 41 basis points — .41 percent — when compared with smaller competitors.

Now ask yourself: Do you see much difference or any difference in the mortgage rates charged by major lenders when compared with smaller lenders? If borrowers and taxpayers are not getting the advantage of large-scale efficiencies with mortgage rates today then why is it in their interest to replace Fannie Mae and Freddie Mac?