Despite their surprisingly rapid recovery five years after being placed into government conservatorship, Fannie Mae and Freddie Mac will be dissolved, if bi-partisan legislation announced today by the Senate banking committee eventually passes.
Under the bill, private capital would have to take the first 10 percent of all mortgage losses, effectively removing much of the firm federal backing that mortgage-backed securities repackaged by Fannie and Freddie have enjoyed.
via Fannie and Freddie Phase Out “Shocking,” Real Estate Experts Say | Commercial Observer.
