Reason Foundation

Recent Research and Commentary

Fannie Mae Breaks Its 14 Quarter Bailout Streak

May 11, 2012, 12:02pm

Anthony Randazzo

Fannie Mae performed a magic trick this past quarter: they made a net profit including their dividend payment to Treasury for the first time since the fall of 2008 when they were taken into conservatorship. This week, Fannie Mae's 1Q 2012 earnings statement was actually an earnings statement.

(Video) Interview on Reason's New Mortgage Reform Study

May 10, 2012, 2:12pm

Anthony Randazzo

Earlier this week I appeared on Fox Business to discuss our recent Reason Foundation study "Restoring Trust in Mortgage Backed-Securities." We argue that to end the government housing monopoly and reduce the $5.8 trillion in mortgage debt liability taxpayers have as a result, that Congress should authorize MBS investors to have access to more information about the mortgages they are buying, and that the mortgage industry should create a group to create clear mortgage definitions that do not rely on federal regulations like the qualified residential mortgage.

How to Restore Trust in Mortgage-Backed Securities

Perpetuating government control of housing finance in today’s era of high deficits is unaffordable

May 10, 2012

Anthony Randazzo, Marc Joffe

Over the past four years, there have been a number of government efforts to spark the rusted engine of the U.S. housing market. These include tax refund incentive programs for borrowers and incentive payments to banks to modify mortgages. The Federal Reserve has run a “quantitative easing” program designed to push mortgage rates to historical lows below 4 percent. And more than 90 percent of American mortgages that originated in 2011 were securitized by government entities using taxpayer funds to guarantee investors against default risk. Despite these programs, the American housing market remains stalled.

 

Freddie Mac Takes $19 Million More from Taxpayers

May 8, 2012, 7:01pm

Anthony Randazzo

Freddie Mac reported last Thursday it needs $19 million from the U.S. taxpayers to remain solvent after making a dividend payment to the Treasury department following first quarter 2012 financial reporting.

How to Reduce the Government's Trillions In Housing Credit Risk

New ideas for the mortgage reform debate

May 7, 2012

Anthony Randazzo, Marc Joffe

Over $5.8 trillion in home mortgage debt in the United States is now either owned or guaranteed by a federal entity - be it the Federal Housing Administration (FHA), Ginnie Mae, the Veterans Housing Administration, or one of the two government-sponsored enterprises (GSEs) under "conservatorship" since 2008. This mother lode of guaranteed debt constitutes a large contingent liability facing American taxpayers. If a future economic crisis triggers widespread defaults within this mortgage pool, hundreds of billions of dollars could be added to the nation's already unsustainable deficits.

New Study: Restoring Trust in Mortgage-Backed Securities

May 3, 2012, 11:29am

In a new study, released today, former Moody's Analytics senior director Marc Joffe and Reason Foundation director of economic research Anthony Randazzo find that the profound lack of confidence in the models used by credit rating agencies to assess residential mortgage-backed securities (RMBS) and in the rating agencies themselves is a substantial roadblock to housing recovery in America.

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