Housing godzillas Fannie Mae and Freddie Mac are threatening the countryside again, and better hide the children. It’s not enough that taxpayers stand behind their $7.5 trillion in mortgages. Now Freddie wants taxpayers to back second mortgages—i.e., de facto consumer loans. What could go wrong?
Higher interest rates have slowed the housing market and reduced cash-out refinancing following the pandemic boom. This has crimped the businesses of mortgage lenders and Fannie and Freddie, the government-sponsored enterprises (GSEs) that buy and guarantee home loans. At the same time, Americans are paying more to borrow for cars and other things.
