mortgage

Housing winners and losers under President Trump

Unknown: Fannie and Freddie
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Unknown: Fannie and Freddie | Frontpage/Shutterstock.com

Unknown: Fannie and Freddie

Fannie Mae and Freddie Mac are the government-sponsored enterprises that bind together the housing finance system. They were placed under government conservatorship during the financial crisis. They remain under the supervision of a federal regulator.

Many observers want to shrink their importance or even eliminate the enterprises. They argue that Fannie and Freddie take unnecessary risks because they are backstopped by taxpayers. So taxpayers are on the hook when Fannie and Freddie lose money, as they did during the financial crisis. The Republican platform says the "utility of both agencies should be reconsidered."

Sharga says, "The concern everybody in the industry must have is this: Whatever is done must be done carefully and thoughtfully, because 96 percent of the market is guaranteed by the government."

That 96 percent figure includes not only Fannie and Freddie, but also Ginnie Mae. Ginnie buys loans insured by the Federal Housing Administration and mortgages guaranteed by the Department of Veterans Affairs. The Republican platform questions the wisdom of giving FHA loans to high-income borrowers. Will there be income limits for FHA-insured loans? Too soon to know.

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