Battle Lines Drawn in Freddie, Fannie Fight

Making mortgage giants public, breaking them up or nursing them to health seen as options
By Jim O'Neill,  Newser User
Posted Sep 9, 2008 9:21 AM CDT
A view of Fannie Mae headquarters,   (Getty Images)
camera-icon View 4 more images

(Newser) – What Freddie Mac and Fannie Mae look like in the future—and whether they continue to exist in a recognizable form at all—depends on how Washington looks next year, the New York Times reports. The battle already has begun, with the White House and congressional Democrats blaming each other for the collapse of the mortgage giants, even as Treasury officials push their own plan.

The three distinct plans for Fannie and Freddie:

  • Making them public utilities or government agencies: Some Treasury officials believe the best course is to make them smaller and more tightly controlled.
  • Nursing them back to health: Many Democrats favor this approach, given the role of Fannie/Freddie in providing affordable housing.
  • Dissolving them entirely: Some in the White House, and other Republicans, want to spin Fannie and Freddie off into the private sector.