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What May Happen to Fannie Mae and Freddie Mac Next Year

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Did Obama and McCain Miss an SEO Opportunity With the News About Fannie and Freddie?

Let me state that this blog is not meant as a political forum, and I am not advocating one candidate over the other. My focus is real estate. With the government takeover of the two mortgage giants, I realized that the housing crisis has become an more of a political issue than a financial one. The markets will not determine the outcome of our situation, so we need to look to our leaders to see what that might be. Having come just at the time of an election, the situation makes for an interesting one, since the course of action will be taken by a new head of state and his appointees.

I typed in the candidates names and the takeover into a search engine to see what might come up. I thought that this would be a good opportunity for the candidates to express their views on how they would handle these firms. News stories came first, which is why I think they both may have missed out on using SEO to reach out to voters concerned about what this takeover may mean. Each candidate had something to say on the campaign trail, but I saw nothing directing me to their sites.

I went to their sites though with the hope of finding some information. Nothing dealing with how they would handle Freddie and Fannie now that they are under government control, but they do lay out the general ideas for dealing with the housing crisis. You can read McCain’s view here, and Obama’s view here.

Obama spoke of concern over the severance package of the ousted CEOs, which struck a chord with me. I could never understand how a person who was removed from a firm for doing a bad job could be rewarded for that inferior work. If you are being dismissed, you should not walk away with a generous amount of money. Otherwise, a quick glance at the news did not seem to highlight other thoughts which he may have on the future of Fannie or Freddie.

McCain called the takeover “outrageous” but he agreed with the Bush administration’s action. He did use it as an opportunity to point to a part of his plan that Fannie and Freddie should be downsized, which was clever way to emphasize his plan. To spread out the responsibilities of these firms to many other companies is not a bad idea. The failure of one or two firms would not have such a vast impact then. My concern is thinking back to the years of McCain’s hero, Ronald Reagan. That president promised us a smaller government, but delivered a government that was growing ever larger. I just cannot see the downsizing of these two giants happening any time soon.

One thing that I think that can be safely stated is that the markets will have to stabilize before any action as to the future of these firms can be determined. Such stabilization may not take place until the next president begins his second year in office. My guess is that Fannie and Freddie may reemerge as entities very similar to what they are now, but Congress will enact a law which will somehow reduce the risk that they were currently exposed to. This may mean stricter accounting rules for the firms to ensure that they have the capital on hand which they claim to have; another corporation to increase competition like what Freddie was supposed to do for Fannie; limits on their lobbying which does not really mean much; or limiting the loans that they buy in the hope to spread out the risk. We will have to wait and see.

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© Frank Schulte-Ladbeck Professional Home Inspector Houston, Texas
Frank Theodor Schulte-Ladbeck
home inspector, TREC# 9073
Houston , Texas , 77063 United States

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