Reddit reviews Shaky Ground: The Strange Saga of the U.S. Mortgage Giants
We found 2 Reddit comments about Shaky Ground: The Strange Saga of the U.S. Mortgage Giants. Here are the top ones, ranked by their Reddit score.
If anyone is interested in a deeper understanding of this subject, Bethany McLean who wrote The Smartest Guys in the Room (about Enron) wrote a fantastic book on Fannie and Freddie. She also talks about it on the podcast Invest Like the Best and makes the point that America essentially subsidizes home ownership like Europeans subsidize healthcare.
Book link here.
EDIT (copied from comment below for visibility)
The mortgages that Fannie and Freddie buy are every day person’s mortgages. Yes, they are subsidizing mortgage rates to standardize them across locations, but more to the point, they do not actually benefit the rich. Truly wealthy people buying multi-million dollar houses do not get their mortgages through Fannie and Freddie. Their credit is too good, and they get even lower rates through private lenders. The rich are actually the ONLY group of people who do not benefit from Fannie and Freddie. I would really encourage you to listen to the episode of the podcast Invest Like the Best with the author I referenced above.
Beyond being a subsidized “luxury,” homes in the United States are the average person‘s greatest financial asset and source of borrowing power. This can actually be a beneficial thing to the economy and a stabilizing factor. You can make arguments about the validity of that system and the way it subjects individuals to greater exposure to the real estate markets, but there are arguments to be made for subsidized home ownership. Fannie and Freddie are in the situation they are in now, as a semi-public corporation because the mortgage market failed and taxpayers took the risk of buying the loans which were distressed. Now, the taxpayers are reaping the benefit of the market rebounding. Like in any market, those who take the risk and put up the capital reap the rewards. We would be in a much worse situation had Fannie and Freddie not been backed by the government.
I believe the outcome will come in favor of the shareholders.
Bethany McLean has a number of great articles:
http://mobile.nytimes.com/2015/07/20/opinion/fannie-and-freddie-are-back-bigger-and-badder-than-ever.html
http://www.pbs.org/newshour/bb/done-fannie-mae-freddie-mac/
Her book(she not in any way involved in the posting of this link. I'm recommending this on my own, I get nothing out of it):http://www.amazon.com/Shaky-Ground-Strange-Mortgage-Giants/dp/0990976300