Commentary: Replace GSEs with privately capitalized firms

10/14/2010 | AmericanBanker.com (subscription required)

John H. Dalton, president of The Financial Services Roundtable's Housing Policy Council, proposes that Fannie Mae and Freddie Mac be replaced by "mortgage securities insurance companies." The companies would be privately capitalized but federally chartered and supervised by federal regulators. The companies would purchase mortgages from banks, sell residential mortgage-backed securities to investors and also assume the guarantee functions of the government-sponsored enterprises.

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