The government has been talking about the future of Fannie Mae and Freddie Mac for some time now, but without these organizations, there would be few buyers for 30-year, fixed-rate mortgages, bank analyst Dick Bove said. Per CNBC:
"Is the United States ready to take a shock to housing prices because we're getting rid of 30-year fixed rate mortgages?" Bove said banks have admitted to him privately that they cannot make money on 30-year fixed-rate home loans anymore due to new rules on capital reserves and securitizing mortgages.
Bove said banks have admitted to him privately that they cannot make money on 30-year fixed-rate home loans anymore due to new rules on capital reserves and securitizing mortgages.
However, the Treasury Department is aiming to phase out Fannie Mae and Freddie Mac by 2018.
