Who will fill Fannie and Freddie’s shoes?

Published on Mar 17, 2014

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A bill recently agreed upon by the Senate Banking Committee outlines a new mortgage system that will no longer largely rest on the shoulders of Fannie Mae and Freddie Mac.

A likely source of debate moving forward will be the question of what entities will fill their shoes in buying mortgages, bundling them into securities and selling them to investors.

The Wall Street Journal’s Nick Timiraos writes that there are three main options: big banks, which could make institutions already “too big to fail” even bigger; new tightly regulated companies (or even a government utility); or reduced versions of Fannie Mae and Freddie Mac.

Source: The Wall Street Journal