Assessing The Public Costs And Benefits Of Fannie Mae And Freddie Mac

Explains the purpose and function of government-sponsored enterprises (GSEs). Describes how the housing GSEs segment in the secondary market works. Provides insights on alternative funding strategies and risk, and the necessity of congressional oversight. Focuses on the federal costs of Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation). Contains 17 charts, tables and graphs.

I. Understanding the housing GSEs: What, why, how? -- II. Federal costs of Fannie Mae and Freddie Mac -- III. Public benefits of the housing GSEs -- IV. Congress and the GSEs: Weak control and incompatible interests -- V. Options for improving the GSE cost-benefit balance for taxpayers.

The book demonstrates how politicians and federal agencies dominated Fannie Mae and Freddie Mac and took just thirteen years to wreck the American dream of home ownership.

This report demonstrates that a significant proportion of prospective homeowners remains underserved by the mortgage finance industry. The report reviews and evaluates the framework of housing goals that has been established by Fannie Mae and Freddie Mac. It finds that the housing goals represent a promising approach to focusing their resources on the mortgage credit needs of homebuyers. Such a programmatic emphasis by these enterprises represents an appropriate exchange for the benefits that they receive through their ties with the Federal government.