Monday, November 16, 2015

US Government Guaranteed 75 Percent Of New Mortgages For Home Purchases In 2015: Up From 30 Percent In 2006

From The Washington Post, Opinion, "Why Fannie Mae and Freddie Mac survived" by Robert J. Samuelson:
Here are the numbers. Fannie and Freddie provide government mortgage guarantees (i.e., if homeowners default, the GSEs repay mortgage investors in full). In 2015, GSE guarantees cover about half of new mortgages for home purchases; including other agencies — the Federal Housing Administration, which caters to lower-income borrowers, and Veterans Affairs — the government guarantees three-quarters of new mortgages. By contrast, the government’s share in 2006 was slightly more than 30 percent, with the GSEs representing most of that.

We have effectively nationalized housing finance. Private money retreated, and the GSEs have returned to profitability — with all the profits going to the U.S. treasury.

No comments:

Post a Comment