Bary Frank, chairman of the House Financial Services Committee, made headlines yesterday by proposing that Fannie Mae and Freddie Mac be "abolished," according to the Associated Press. He wants to see the companies replaced by "a new system for providing money for home loans."
He doesn't want to see the reforms done "piecemeal" and believes scrapping the current system and creating a new one is the best approach.
The A.P. in the article, also notes that Fannie and Freddie "have been kept afloat with $112 billion in federal aid. Late last year, the Obama administration pledged to cover unlimited losses through 2012 for both companies, lifting an earlier cap of $400 billion."
An amazing development and one that will send shockwaves through the housing market if it comes to pass. Stay tuned.
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