Wayne T. Price and Lee Nessel | Florida Today |
“Many area Realtors, and others involved in the housing market, say changes probably are needed with Fannie Mae and Freddie Mac but the key will be moving slowly and cautiously.
“This is a very forward-looking notion,” said Geoffrey K. Turnbull, a professor of real estate at the University of Central Florida’s Dr. P. Phillips School of Real Estate and the Department of Finance.
“But this is recognition that we don’t want to have a fully nationalized mortgage market going forward,” he said.
Turnbull’s comments follow an address Wednesday by President Obama, and proposals in both the U.S. House and Senate, to phase out, or at least diminish, Fannie Mae’s and Freddie Mac’s role in the housing industry.
Fannie and Freddie own or guarantee nearly half of all U.S. mortgages and 90 percent of new ones.
They buy mortgages from lenders, package them as bonds, guarantee them against default and sell them to investors. That helps banks get rid of risk from their balance sheets, freeing up more money to lend.
But it’s not an ideal situation because it places more risk on taxpayers rather than private lenders.
House and Senate bills would phase out Fannie and Freddie over five years and shrink the government’s role in guaranteeing mortgage securities.”