Fannie and Freddie are Useless

So says Anthony Sanders of GWU, testifying before a House Subcommittee today:

“Fannie and Freddie will not be missed, nor will their absence make a difference to the housing market or the economy, particularly if taxpayers are no longer on the hook for further losses,” Sanders plans to tell the Financial Services Subcommittee on Capital Markets and GSEs Wednesday.

Sanders offers details here for how to wind it down. It’s well worth reading. Among the things he notes is that the 30 year fixed with no prepayment penalty would likely disappear without the GSEs. The US is unique in that being the primary house finance vehicle.