Rickety housing markets
Mortgage reforms on both sides of the border might stabilize markets, or might not
Business headlines flowed fast this week: Regulatory limits on
government-backed mortgage security issuance kicked in and ruffled
markets in Canada, and President Obama endorsed a Senate bill that would
overturn housing finance mechanisms in the United States.
The U.S. first. The current in the U.S. represents fundamental reform
proposals, in response to the housing bust there that Canada has, so
far, avoided. Fannie Mae, Freddie Mac, and a flood of other federal
agencies with funny nicknames, lend, insure and securitize trillions of
dollars of home loans, and Congress and the President would like to
change the system before they are overwhelmed again.
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