Guaranteed to Fail: Fannie Mae, Freddie Mac and the Debacle of Mortgage Finance

摘要

The future of failed mortgage finance giants Fannie Mae and Freddie Mac-and of the policy approach they epitomize-is probably the foremost challenge facing the US housing sector today. Several years on from the Global Financial Crisis (GFC) of 2008, American housing funding remains hamstrung by the massive liabilities of these two agencies-both were downgraded by credit-rating agency Standard & Poor's in August 2011. Moreover, the US policy debate is paralyzed by disagreement over whether the agencies were villains or victims of the GFC; in September 2011, Fannie and Freddie filed suits against 17 banks accusing them of misrepresenting the quality of mortgages sold at the height of the housing bubble. A few days later the Securities and Exchange Commission (SEC) revealed a civic settlement against Fannie and Freddie over whether they adequately disclosed their exposure to risky sub-prime loans.