Comment on the Federal Housing Finance Agency’s Strategic Plan: Fiscal Years 2013-2017

Abstract

This is a comment upon Performance Goal 4.3 from the Federal Housing Finance Agency’s Strategic Plan: Fiscal Years 2013-2017. Performance Goal 4.3 addresses the future of Fannie Mae and Freddie Mac as well as the future of the infrastructure of the residential housing finance market. This comment will address the future of Fannie and Freddie after they exit conservatorship. Once analyzed in the context of regulatory theory, Fannie and Freddie’s future seems clear. They should be privatized so that they can compete on an even playing field with other financial institutions, and their public functions should be assumed by pure government actors. This comment will also look at the future of the thirty-year fixed-rate mortgage, the lock-in, and the low-down-payment mortgage.

Keywords: Fannie, Freddie, lock-in, tba, 30 year, financial crisis, ARMs, adjustable rate mortgage, fixed rate mortgage, low down payment, residential mortgage market