Fannie Mae and Freddie Mac to go Private?

Fannie and Freddie to go Private? What impact could this have on mortgages? These entities were private until the 2008 meltdown when the government intervened and made them Government Sponsored Entities. Nobody can predict exactly what the affect could be on the housing market, but here are some potential pros and cons:

Pros:

• Reduced government risk: Taxpayers may no longer be on the hook if things go wrong.

• Increased efficiency: Private ownership could encourage more innovation and cost control.

• Stockholder accountability: Management may be more responsive to investor demands for performance.

Cons:

• Higher mortgage costs: Without government backing, borrowing might become more expensive.

• Market instability: Removing federal support could rattle the housing market, especially during downturns.

• Access concerns: Some worry private ownership might limit support for affordable housing.