Peter J. Wallison, senior fellow at the American Enterprise Institute, writes that Federal Reserve data show that the government does not have to guarantee mortgages. As lawmakers and government officials consider how to replace Fannie Mae and Freddie Mac, they should consider the history of institutional investment. "The Obama administration has already recognized, in a recent white paper, that a properly designed private system could work," Wallison writes. "All that is necessary now is for Republicans in the House to define the terms of a prime mortgage and how Fannie and Freddie can gradually be withdrawn from the market."
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