Fannie Mae-No Politics (FNMA)

[big-yank]

I have said for ages that the housing dilemma that pits a privatized Fannie Mae against the government is totally alleviated by simply transferring the affordable housing directives and DTS mandates to be fulfilled by Ginnie Mae and removed from the private sector GSEs. That is where much of the "risky business" originated from in 2007/08. That is why so many pundits flip out and demand 4.5% reserves for any re-privatized Fannie & Freddie.

It has become way to easy for critics to play the blame game by claiming shareholders want all the profits but want government to pay their way when times get tough. But it is just as easy and logical to point out that government, itself, creates a whole lot of the risk leading up to crises, and all that inherently large cost derived from same, because it insists the GSEs must actively support affordable housing "Social Engineering" programs.

I am not being critical of affordable housing goals or support for programs that facilitate them. I am simply observing that the government should own the risks and costs for their agendized housing programs, not private enterprise firms like Fannie Mae and Freddie Mac.

The answer to most things "government" is the simple one.