A large majority of consumers surveyed say they want U.S. mortgage giants Freddie Mac and Fannie Mae to stop buying home mortgages. The opinion poll found that 72% of all respondents want the companies, which act as a back-stop for the nation’s mortgage market to stop purchasing home loans from banks and other mortgage lenders.
The two government giants have been bailed out by tax payers at a cost exceeding $184 billion for failed mortgages it purchased during the real estate bubble. Fannie and Freddie were taken over by government authorities four years ago, and since then proposals have been made to repair the government enterprises.
The Federal Housing Finance Agency (FHFA) was formed by the Obama administration to oversee the lending giants. But Congress has failed to reach an agreement to repair or replace the lenders, despite a series of proposals being offered by a legion of Congressional leaders.
In the mean time, an estimated 85% of U.S. mortgages being underwritten in the current financial climate are being purchased by the two government lenders. Financial analysts are concerned about how the nation’s mortgage market would do if the mortgage giants halted buying loans from lenders. Fannie and Freddie purchase the loans and then re-sell them as securities to investors.
Commercial banks and savings and loans lent to borrowers much more aggressively before the financial crisis in 2008. But a series of bank failures and the foreclosure crisis has led to a slowdown in mortgage lending. Lenders are requiring higher credit scores and proof of income to make home loans with higher down payments.
Do you feel that Freddie Mac and Fannie Mae, which have been bailed out by tax payers should be stopped from purchasing home mortgages?
Yes 72% No 28%
To see the previous poll results click here.