Financial Times: Fannie and Freddie Plan Gets Washington Attention

The Financial Times ran an article pointing out that the debate on housing reform and the government sponsored enterprises (GSEs) is heating up in Washington, D.C. The article points to Bruce Berkowitz’s Fairholme Funds’ proposal to invest capital in the GSEs as an indication that private capital may have some interest and may still see some value in the GSEs.

Senator Corker claimed that the hedge fund’s proposal lent support to the bill he is advancing in the Senate to eliminate the GSEs. But the Corker-Warner does not adequately deal with Fannie and Freddie’s shareholders, and leaves too many questions. Ralph Nader urged other Fannie and Freddie shareholders to come together and lobby their representatives in Congress. Nader said they are being ignored and “ripped off” by Congress.

The timeframe and structure of the Corker-Warner proposal was a major concern voiced by\many of the witnesses who provided testimony at the hearing before the Senate Committee on Banking, Housing and Urban Affairs. Jim Millstein said that “you can’t just flip a switch” after the five year phase-in period and predict that private capital will appear on command. To read the full Financial Times article, click here.

Comments are Disabled