What Would the World Look Like Without Fannie and Freddie?

In Thursday's edition of The Motley Fool's everything-financials show, Where the Money Is, banking analysts Matt Koppenheffer and David Hanson tackle the top financial stories of the day.

Matt and David discuss the far-reaching implications of Fannie Mae and Freddie Mac, as well as some good housing news.

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Editor's note: In the above video, Matt refers to AGNC's CIO as Doug Kain. Mr. Kain's first name is Gary. The Fool regrets the error.

You can follow David and Matt on Twitter. 



Read/Post Comments (7) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 27, 2013, at 2:14 PM, infinitemf wrote:

    What Would the World Look Like Without Fannie and Freddie?

    Loan Sharks will take over and rule the mortgage world.

  • Report this Comment On June 27, 2013, at 2:19 PM, infinitemf wrote:

    If FnF are wound down, all housing finance will be

    taken over by loan sharks. After 2008 crisis individual home ownership

    declined sharply and investor ownership increased. During housing boom

    real estate investors made big money selling houses and after crash they bought

    them back for pennies on dollar making double kill. If they are successful in winding down

    FnF it will be triple kill and will be biggest of all. During crisis banks refused to trust

    even other banks and stopped lending to each other. During future crisis, it will

    be anybody's guess about what will happen to mortgage owners. During crisis FnF were the

    only saviors (under FHFA management) to bail out these lenders by buying their

    sub-prime mortgage loans.

    Private sector has shown time and again that they can not be trusted to do right things without

    proper regulations. It will be suicidal for national economy to entrust them with such a vital

    economic function.

    We should ask simple question:

    Who are going to benefit by winding down FnF other than pesky ideologists and big investors?

    It will bring out the hidden sinister truth.

  • Report this Comment On June 27, 2013, at 5:51 PM, Caludio wrote:

    Price target of Fannie Mae by Dec $19.80

    If you are a serious investor you should read six articles : 2 by Bryndon Fisher and 4 by

    "user 12736991" Just Google " Bryndon Fisher"

    and "user 12736991" , read this articles and you will have valueable information that can make a difference in your investment account.

  • Report this Comment On June 27, 2013, at 6:49 PM, notafool2013 wrote:

    Fannie Mae going down -> interest rate going up -> mortgage cost going up -> house affordability going down -> house demand going down -> house price going down -> local economy going down -> local governments going down

    Foreign investors with lots of cash will load up US properties. Angry local voters will take the revenge during the election.

  • Report this Comment On June 27, 2013, at 7:10 PM, infinitemf wrote:

    Dear Matt Koppenheffer and David Hanson,

    Please read the articles mentioned by Caludio.

    I know you people have made up your mind.

    But at least you know what others think.

    Caludio:

    if you are a serious investor you should read six articles : 2 by Bryndon Fisher and 4 by

    "user 12736991" Just Google " Bryndon Fisher"

    and "user 12736991" , read this articles and you will have valueable information that can make a difference in your investment account.

  • Report this Comment On June 28, 2013, at 7:31 AM, SPMike wrote:

    after reading just the comments, i don't need to watch the video...in fact, i'm never going watch motley fool video over a printed article, so comments or not, if there is not a printed version of the video, i'm not going to watch it....in fact further, i think it's kind of like trickery to make us watch a video when we click onto a motley link that has only a video

  • Report this Comment On June 28, 2013, at 10:34 AM, Baileybldgnloan wrote:

    POTTER

    Peter Bailey was not a business man. That's what killed him. Oh,

    I don't mean any disrespect to him, God rest his soul. He was a

    man of high ideals,

    so-called, but ideals without common sense can ruin this town.

    (picking up papers from table)

    Now, you take this loan here to Ernie Bishop . . . You know, that

    fellow that sits around all day on his brains in his taxi. You

    know . . . I happen to know the bank

    turned down this loan, but he comes here and we're building him a

    house worth five thousand dollars. Why?

    George is at the door of the office, holding his coat and papers,

    ready to leave.

    GEORGE

    Well, I handled that, Mr. Potter. You have all the papers there.

    His salary, insurance. I can personally vouch for his character.

    POTTER (sarcastically)

    A friend of yours?

    GEORGE

    Yes, sir.

    POTTER

    You see, if you shoot pool with some employee here, you can come

    and borrow money. What does that get us? A discontented, lazy

    rabble instead of a

    thrifty working class. And all because a few starry-eyed dreamers

    like Peter Bailey stir them up and fill their heads with a lot of

    impossible ideas. Now, I say . . .

    George puts down his coat and comes around to the table, incensed

    by what Potter is saying about his father.

    GEORGE

    Just a minute –– just a minute. Now, hold on, Mr. Potter. You're

    right when you say my father was no business man. I know that.

    Why he ever started

    this cheap, penny-ante Building and Loan, I'll never know. But

    neither you nor anybody else can say anything against his

    character, because his whole life was . . .

    Why, in the twenty-five years since he and Uncle Billy started

    this thing, he never once thought of himself. Isn't that right,

    Uncle Billy? He didn't save enough money

    to send Harry to school, let alone me. But he did help a few

    people get out of your slums, Mr. Potter. And what's wrong with

    that? Why . . . Here, you're all

    businessmen here. Doesn't it make them better citizens? Doesn't

    it make them better customers? You . . . you said . . . What'd

    you say just a minute ago? . . . They

    had to wait and save their money before they even ought to think

    of a decent home. Wait! Wait for what? Until their children grow

    up and leave them? Until they're

    so old and broken-down that they . . . Do you know how long it

    takes a working man to save five thousand dollars? Just remember

    this, Mr. Potter, that this rabble

    you're talking about . . . they do most of the working and paying

    and living and dying in this community. Well, is it too much to

    have them work and pay and live and

    die in a couple of decent rooms and a bath? Anyway, my father

    didn't think so. People were human beings to him, but to you, a

    warped, frustrated old man, they're

    cattle. Well, in my book he died a much richer man than you'll

    ever be!

    POTTER

    I'm not interested in your book. I'm talking about the Building

    and Loan.

    GEORGE

    I know very well what you're talking about. You're talking about

    something you can't get your fingers on, and it's galling you.

    That's what you're talking

    about, I know.

    (to the Board)

    Well, I've said too much. I . . . You're the Board here. You do

    what you want with this thing. Just one thing more, though. This

    town needs this measly one-horse

    institution if only to have some place where people can come

    without crawling to Potter. Come on, Uncle Billy!

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