WASHINGTON, DC-Despite President Barack Obama's and Congressional lawmakers' calls for the dismantling of GSEs Fannie Mae and Freddie Mac, a bipartisan group of U.S. senators writing reform legislation is struggling with how to ensure that regulatory changes don't derail the housing recovery.
Some Democratic lawmakers are saying they are leery of liquidating the GSEs, leaving it to private entities to finance home loans, according to Bloomberg News.
“I'm not sure that eliminating the GSEs totally makes sense, as some have suggested, and so I have an open mind on it,” Sen. Robert Menendez of New Jersey, a Democratic member of the Senate Banking Committee. Senate Majority Leader Harry Reid, a Nevada Democrat, said in August that the companies shouldn't be dismantled.
Isaac Boltansky, an analyst with Compass Point Research & Trading LLC in Washington, says, “The conversation is going to shift to whether it's necessary to burn down the whole house just to rebuild it, or whether there's merit in renovating it.” See story at Bloomberg News.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
