I don't know... I could see Fannie and Freddie being replaced by a new entity with more strict contols, or they could just revamp the extisting entities.  Something is needed to provide liquidity in the mortgage market, but as we have seen if they just buy anything and everything the taxpayers shoulder the risk.

We covered this in an article on the 2nd - The Future of Fannie and Freddie in Question.  There are several ideas for fixing the problem.  Some want more federal involvement in the form of explicit quarantees of the mortgage backed securities and others want Fannie and Freddie privatized.  I don't think Frank is too far off to suggest abolishing Fanne and Freddie and starting over with a new system.

Best,
Robert A. Franco
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