Fannie Mae-No Politics (FNMA)

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Without Fannie and Freddie, there would be no viable housing market. We know this because of what banks did in the 1980s, raised interest rates into double digits.

Banks have been lobbying for years to either downsize or abolish the government-owned GSEs. Banks created the so-called shadow banking system outside of any regulatory oversight, which is responsible for much of the shadow housing inventory still on their books -- an estimated five million homes either delinquent or with negative equity in their homes in danger of foreclosure.

A mortgage banking industry has grown around the secondary market, and as long as banks will adhere to the same gold standard underwriting as Fannie and Freddie, there is no reason they shouldn't be generating record profits, as well.

B!