This thought came up while looking at Mortgage Bankers Association (MBA) CEO David Stevens’ proposal, unveiled at the MBA’s National Secondary Market Conference in New York, to combine Freddie Mac and Fannie Mae’s mortgage bonds into a single security.
This is a good idea, but why stop there? Do we really need two agencies to make a market in the conforming space? The question remains germane since nobody in the government or Congress seems to know what to do with the two previously hemorrhaging agencies that now are making operating profits. The current strategy (not doing anything) leads to the spectacle of the two slowly earning their way out of the tremendous losses they have cost the taxpayers over the next several years (or generations).