The battle over the future of Fannie Mae and Freddie Mac, the two mortgage giants that underpin our housing finance, has been one of the most bizarre ones I’ve covered. For decades, Republicans have tried to kill the entities, which grease the wheels of middle-class housing, in large part because they also have an affordable housing mandate. But why would the Obama administration join in that effort and end up trying to give away this business to the same banks it had to bail out during the financial crisis? And lie about it in court?
That’s exactly what happened, and if it had not been for the legal fight put up by hedge fund billionaires and thousands of small investors ( unlike any others in American capitalism, they are routinely called “speculators” in the media), the whole thing could have crumbled. The result likely would have been more expensive housing finance, and fewer homebuyers. But fight it they did, and now the Trump administration looks poised to finally end this mess.
Here’s my recent Institutional Investor story, which is a brief summary of the state of play.
An earlier New York Post story details the lies of the Obama administration, and the court documents that are sealed will see the light of day soon.