The Bains

Hence mortgage rates will remain higher. Fannie Mae & Freddie Mac did a great job of providing low cost mortgages for 3 decades, but then morphed into the largest mortgage
bond speculators on the planet, according to Dr. Mark Dotzour, Chief Economist at TX A&M
Real Estate Center. They failed when they became part of the problem & not the solution to
the housing market by veering from their mission of ‘packaging mortgages” into the risky waters of keeping mortgages & hoping they hold their value.
Fannie & Freddie MUST go back to their original purpose as a conduit for mortgages. Govt.
should monitor the spread between Fannie mortgage rates & the 10-year treasury rate.
Mortgage rates should be about 1.6% higher. That means a 30 year mortgage would be 5.1% TODAY. If value is crammed down - as the Federal Reserve & Congress want to do -
why buy any more U. S. mortgage securities?

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