What is the Fix for US Mortgage Ills

What is wrong in the USA mortgage business sector and what medicine is needed to fix the problems!

Well that is a difficult Conundrum as the biggest problems have been known for a long time they revolve around arguably the two biggest companies in the mortgage industry Fannie Mae and Freddie Mac.

Both bailed out by the US government in 2008

The Philly Inquirer sees the problem this way – quote – Another solution is the opposite approach: full privatization. Allow no government backstop for the mortgage market, implicit or explicit. Government might retain a small role, but Fannie and Freddie would be spun out to the private market.

A privatized system would give all parties more incentive to be prudent. Mortgage originators, issuers of mortgage-backed securities, rating agencies, and investors would all suffer if they made bad decisions. Nobody would be too big to fail, and taxpayers would be off the hook – at least in theory.

Unraveling all that is wrong with these two behemoths Fannie Mae and Freddie Mac is a massive problem as the sheer size and complexity of these companies makes downsizing and regulating the organizations very difficult to implement!

How The Phllly Inquirer views all the facts here – quote –

http://www.philly.com/inquirer/opinion/20110123_Healing_the_mortgage_ills.html

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