Merge F&f To Fanfred (or Fredfan) Plan Might Pass Congress

[Mike Kennedy]

http://www.marketwatch.com/story/th...ust-might-pass-congress-2016-03-24?siteid=rss

 

[GWISC]

The authors say their proposal offers many advantages: It would encourage healthy levels of competition among private market participants and avoid the “too big to fail” problems that crippled the financial system in 2008.

The said the Titanic was unsinkable. I dont see this as avoiding a "too big to fail" problem. Going from two entities to one? At least there are two now. They propose the new fanfred to buy loans and then bundle and securitize the loans into bonds which are then sold to private investors. There could be millions of bonds which all float in the same boat, only many investors will go down with the ship if there is a catastophic failure.

Wouldn't a better solution be to have several smaller fannie and freddie types all competing or specializing in geographic areas or types. I would rather have several private mortgage giants, but without the implied safety net of the taxpayer. Knowing there would be no safety net should instill some sort of responsibity in aiming for long term mortgage company health rather than a quick profit at the expense of the long term health of the company.

 

[Riick]

Wouldn't a better solution be to have several smaller fannie and freddie types all competing or specializing in geographic areas or types.
I would rather have several private mortgage giants, but without the implied safety net of the taxpayer.
Knowing there would be no safety net should instill some sort of responsibity in aiming for long term mortgage company health rather than a quick profit at the expense of the long term health of the company

Sorry, but that would make much too much sense, and worse yet, it would be common sense.
Economists, Politicians, and Intellectuals of all stripes avoid that stuff like the plague.

 

[Howard Klahr]

They propose the new fanfred to buy loans and then bundle and securitize the loans into bonds which are then sold to private investors.

This already is what occurs

 

[djd09]

"The authors say their proposal offers many advantages: It would encourage healthy levels of competition among private market participants and avoid the “too big to fail” problems that crippled the financial system in 2008."
http://www.marketwatch.com/story/th...ust-might-pass-congress-2016-03-24?siteid=rss

Too big too Fail???????? So they want to combine the two into one? What's the punch line?