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December 2, 2008 8:03:27 PM CST

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Battle Lines Drawn in Freddie, Fannie Fight

Posted Sep 9, 08 9:21 AM CDT in Politics,  Opinion,  Business 

(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.

Source New York Times

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A view of Fannie Mae headquarters,   (Getty Images)
A 'detour' sign is posted at the main entrance to the Freddie Mac headquarters on July 14, 2008, in McLean, Virginia.   (Getty Images)
"I heard experts predicting this outcome. But I responded that I take the administration at their word. To find out ... it was going in this direction, it was hard to believe," Sen. Chris Dodd said.   (AP Photo)
Rep. Barney Frank, D-Mass., speaks about the mortgage industry, Monday, May 5, 2008 during a Mortgage Bankers Association Convention in Boston.   (AP Photo/Lisa Poole)
Treasury Secretary Henry Paulson.   (AP Photo/Meet The Press, Natalie Behring)
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Financial Crisis • bailout • Bush administration • subprime crisis • Fannie Mae • Freddie Mac


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