Fannie and Freddie are profitable now, and they’ve paid back all the taxpayer funds that kept them afloat during the worst housing bust since the 1930s. Yet they’re still owned and operated by the U.S. government, a status that was supposed to be temporary when a government conservator took control of the two companies in 2008. “It’s been six years now that the conservator has been overseeing and directing the actions of Fannie Mae and Freddie Mac,” Ed DeMarco, who ran that conservatorship from 2009 to early 2014, tells me in the video above. “This is not a healthy condition.”
The problem is there’s no consensus about what to do with Fannie and Freddie. The government bailout allowed them to continue operating during the 2008 financial meltdown and the deep recession that followed. Without them, the housing market would have essentially shut down and a recession probably would have become a depression.
Watch the video below for more details: