Residential Mortgages and Public Policy: What to Do with Fannie and Freddie?

23 Pages Posted: 7 Mar 2016

See all articles by David Kohn

David Kohn

University of Bridgeport

James S. Sagner

Metropolitan College of New York

Date Written: Spring 2016

Abstract

The current debate on U.S. housing policy focuses on the role of the government in supporting the mortgage market. Existing organizations (Fannie Mae/Freddie Mac) are in conservatorship status, and Congress is considering alternative structures and guarantees including the Johnson‐Crapo bill, to provide catastrophic insurance in support of the coverage from private companies. The resolution of this issue is complicated by the various activities involved in the issue - investment securities, public policy, macroeconomics, accounting, and insurance. This article reviews the impact of these activities on U.S. housing, with a discussion of the feasibility of creating a catastrophic insurance program similar to that of the Federal Deposit Insurance Corporation. The federal government has successfully operated catastrophic insurance programs in support of private sector initiatives, and this experience - while certainly not perfect - may be a reasonable approach to the current Fannie/Freddie dilemma.

Suggested Citation

Kohn, David and Sagner, James S., Residential Mortgages and Public Policy: What to Do with Fannie and Freddie? (Spring 2016). Business and Society Review, Vol. 121, Issue 1, pp. 161-183, 2016, Available at SSRN: https://ssrn.com/abstract=2742414 or http://dx.doi.org/10.1111/basr.12084

David Kohn (Contact Author)

University of Bridgeport ( email )

126 Park Avenue
Bridgeport, CT 06601
United States

James S. Sagner

Metropolitan College of New York ( email )

75 Varick Street
New York, NY 10013
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
180
PlumX Metrics