By Gretchen Morgenson
KUDOS to Treasury and the Department of Housing and Urban Development for some straight talk about the nation’s broken mortgage system.
A report to Congress from those departments, published on Friday, provided some long-awaited analysis by the Obama administration about what went wrong in housing finance — and how to fix it.
The report, entitled “Reforming America’s Housing Finance Market,” zeros in on the perverse incentives created by the nation’s mortgage complex during the years leading up to the panic of 2008. The Treasury’s recommendation that we wind down Fannie Mae and Freddie Mac and let the private mortgage market step in is spot on.
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Related reading:
Republicans Welcome Plan to Wind Down Fannie, Freddie
The Wall Street Journal (11 Feb 11)
Solari Report Blog Commentaries
White House Plans to Revamp Mortgage Market
(10 Feb 11)
Fannie & Freddie Stick Fraudster Legal Bills to the Taxpayers
(24 Jan 11)