Mortgage Loan Compliance | US Govt. $160 Billion Dollar Pet Project

Since our housing bubble burst, the U.S. government has spent more than $160 billion of taxpayers’ money to shore up the mangled finances of the two federal mortgage giants - Fannie Mae and Freddie Mac. The Obama administration has said it plans to wind down the influence of Fannie and Freddie to trim the government's role in the housing market, and Congress has invited several housing market experts to offer opinions on the best ways to limit government involvement.

Anthony Sanders, professor of real estate finance at George Mason University presented seven proposals to the House subcommittee to facilitate the transition, including requiring Fannie and Freddie to dispose of assets not critical to their mission and capping bailout funds to the distressed duo at $200 billion.

The United States doesn't need government-sponsored enterprises such as Fannie Mae and Freddie Mac to sustain the housing market. At least that's what Sanders told the House Subcommittee on Capital Markets and Government Sponsored Enterprises last week.

“Because government-sponsored enterprises (GSEs) back more than 90 percent of all home loans today, they have crowded out private sector lending and distorted the housing-finance landscape”, he says. "Fannie and Freddie will not be missed, nor will their absence make a difference to the housing market or the economy, particularly if taxpayers are no longer on the hook for further losses," Sanders testified.

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