Seeking shelter

Article Highlights

  • Fannie and Freddie had the lowest cost of capital and were the most highly leveraged participants in the mortgage space.

    Tweet This

  • Fannie and Freddie's government-bestowed advantages enabled them to acquire the best of the worst loans.

    Tweet This

  • Continued federal involvement in mortgage lending is like proposing that the fox continue to guard the chicken coop.

    Tweet This

To the Editor:
Jonathan Laing, in his cover story on the future of housing-finance reform ("Fannie, Freddie: On Borrowed Time," July 29) observes that the lower loss rates of Fannie, Freddie, and the FHA, compared with the private sector, demonstrate that they were "more prudent steward[s] of the public trust." It demonstrates no such thing.

Fannie and Freddie had the lowest cost of capital and were the most highly leveraged participants in the mortgage space, government-bestowed advantages that enabled them to acquire the best of the worst loans as they moved out on the risk curve. Their advantages also allowed them to retain a core of traditional lower-risk business.

Please click here to read the full letter to the editor.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Edward J.
Pinto

What's new on AEI

Expanding opportunity in America
image Moving beyond fear: Addressing the threat of the Islamic state in Iraq and Syria
image Foreign policy is not a 'CSI' episode
image The Air Force’s vital role
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Monday, July 21, 2014 | 9:15 a.m. – 11:30 a.m.
Closing the gaps in health outcomes: Alternative paths forward

Please join us for a broader exploration of targeted interventions that provide real promise for reducing health disparities, limiting or delaying the onset of chronic health conditions, and improving the performance of the US health care system.

Monday, July 21, 2014 | 4:00 p.m. – 5:30 p.m.
Comprehending comprehensive universities

Join us for a panel discussion that seeks to comprehend the comprehensives and to determine the role these schools play in the nation’s college completion agenda.

Tuesday, July 22, 2014 | 8:50 a.m. – 12:00 p.m.
Who governs the Internet? A conversation on securing the multistakeholder process

Please join AEI’s Center for Internet, Communications, and Technology Policy for a conference to address key steps we can take, as members of the global community, to maintain a free Internet.

Thursday, July 24, 2014 | 9:00 a.m. – 10:00 a.m.
Expanding opportunity in America: A conversation with House Budget Committee Chairman Paul Ryan

Please join us as House Budget Committee Chairman Paul Ryan (R-WI) unveils a new set of policy reforms aimed at reducing poverty and increasing upward mobility throughout America.

Event Registration is Closed
Thursday, July 24, 2014 | 6:00 p.m. – 7:15 p.m.
Is it time to end the Export-Import Bank?

We welcome you to join us at AEI as POLITICO’s Ben White moderates a lively debate between Tim Carney, one of the bank’s fiercest critics, and Tony Fratto, one of the agency’s staunchest defenders.

Event Registration is Closed
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.
No events scheduled this day.