It could be argued that settling the fate of Fannie Mae and Freddie Mac, the US mortgage underwriters, is an urgent matter, considering the risks and distortions of their continued survival as government-owned and controlled enterprises.
The institutions’ dominant status, giving them broad influence on lending and credit availability, is one consideration. Fannie Mae and Freddie Mac own or guarantee a monumental $5000bn, or 60% of all mortgages, in the country’s secondary mortgage market, which is the world’s second biggest securities market, next only to US treasuries, US Treasury officials say.
