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Fannie/Freddie- profit go to shareholders and losses go to tax payers?
WHITE HOUSE PLANS TO WIND DOWN FANNIE AND FREDDIE
 
 

 
Congress will consider three suggestions.
A fundamental reform for the housing market.For two-and-a-half years, economists and housingindustry analysts have wondered what would happen with Fannie Mae and Freddie Mac. On February 11, they got an answer: the Obama administration announced plans to shut down both of the troubled mortgage giants by 2018 or sooner.1
As he met with the press, Treasury Secretary Timothy Geithner cited the "very broad consensus" that the government should play "a much smaller role" in the housing market.Capitol Hill Republicans would agree, pointing to the $154 billion price tag for the 2008 bailout of both firms. (That is the Treasury's estimate.)2,3

The choices on the table. The Obama administration's white paper offers three proposals to Congress, with the hope of legislation emerging by 2014.1,2,4,5
·         Option 1.The government walks away from the mortgage market except for the FHA, VHA and a few other programs designed to help low-income and moderate-income homebuyers.
·         Option 2.The government offers a kind of downside protection. In addition to backing home loans viathe entities mentioned in Option 1, it would also provide "reinsurance" to guarantee private mortgages inthe ... more

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