Michigan Congressman Gary Peters is proposing doing away with the federal home mortgage financing system. Fannie Mae and Freddie Mac became the backbone of the nation’s mortgage system in the past decade. Fannie and Freddie played a critical role in the housing market collapse.
The two backed billions of dollars’ worth of adjusted rate mortgages which suddenly went into default as the nation slipped into recession. Bailing out Fannie and Freddie may cost the federal government more than 300 billion dollars.
Congressman Gary Peters told Bloomberg News this morning he wants to replace Fannie and Freddie with private firms.
“It’s important that we bring everyone together to this process. We’ve introduced this legislation in a bipartisan way. We’re hoping to get a hearing on it soon. And then, bring in all the stakeholders in just a practical, common sense, problem solving mode. We believe this will be the way forward for us.”