Guaranteed to Fail: Fannie Mae, Freddie Mac, and the Debacle of Mortgage Finance

Guaranteed to Fail Fannie Mae Freddie Mac and the Debacle of Mortgage Finance The financial collapse of Fannie Mae and Freddie Mac in led to one of the most sweeping government interventions in private financial markets in history The bailout has already cost American taxp

  • Title: Guaranteed to Fail: Fannie Mae, Freddie Mac, and the Debacle of Mortgage Finance
  • Author: Viral V. Acharya
  • ISBN: 9780691150789
  • Page: 243
  • Format: Hardcover
  • Guaranteed to Fail: Fannie Mae, Freddie Mac, and the Debacle of Mortgage Finance

    The financial collapse of Fannie Mae and Freddie Mac in 2008 led to one of the most sweeping government interventions in private financial markets in history The bailout has already cost American taxpayers close to 150 billion, and substantially will be needed The U.S economy and by extension, the global financial system has a lot riding on Fannie and Freddie TThe financial collapse of Fannie Mae and Freddie Mac in 2008 led to one of the most sweeping government interventions in private financial markets in history The bailout has already cost American taxpayers close to 150 billion, and substantially will be needed The U.S economy and by extension, the global financial system has a lot riding on Fannie and Freddie They cannot fail, yet that is precisely what these mortgage giants are guaranteed to do How can we limit the damage to our economy, and avoid making the same mistakes in the future Guaranteed to Fail explains how poorly designed government guarantees for Fannie Mae and Freddie Mac led to the debacle of mortgage finance in the United States, weighs different reform proposals, and provides sensible, practical recommendations Despite repeated calls for tougher action, Washington has expanded the scope of its guarantees to Fannie and Freddie, fueling and housing and mortgages all across the economy and putting all of us at risk This book unravels the dizzyingly immense, highly interconnected businesses of Fannie and Freddie It proposes a unique model of reform that emphasizes public private partnership, one that can serve as a blueprint for better organizing and managing government sponsored enterprises like Fannie Mae and Freddie Mac In doing so, Guaranteed to Fail strikes a cautionary note about excessive government intervention in markets.

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      243 Viral V. Acharya
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      Posted by:Viral V. Acharya
      Published :2018-09-14T20:27:31+00:00

    One thought on “Guaranteed to Fail: Fannie Mae, Freddie Mac, and the Debacle of Mortgage Finance

    1. Michael Foley

      Acharya, Richardson, Van Nieuwerburgh, and White are professors at NYU's Stern School of Business. Individually, they are experts in the field of economics. Collectively, they are authors of the finest book on the collapse of the American mortgage market. Acharya et al. take aim at Fannie Mae and Freddie Mac as they describe the series of events that led to their downfall. These events were the result of decades of policy abuses, greed, and mismanagement. As a result, American subprime mortgage [...]

    2. Liam

      "No firm could compete with Fannie and Freddie under these circumstances: they paid less taxes, could borrow at cheaper rates, and were lightly regulated in that they faced low capital requirements for holding similar risks compared to private-sector counterparts." (21-2)"In the end, the GSEs had inadequate capital for the risks that they were taking. But virtually all critics got the immediate source of the problem wrong. What caused the financial downfall of the GSEs was not the interest rate [...]

    3. Max Nova

      A great look into the subprime mortgage crisis. The authors do a great job of explaining the house of cards that was the MBS market and why the whole system went to hell in a hand-basket. They focus particularly on the large GSE's (Fannie and Freddy) and the role they played in distorting the market (because of their governmental subsidies and implicit government backing) and their problematic dual role of both guaranteeing and investing in MBS's

    4. Claire

      I had been confused for the longest time what on earth Fannie Mae, Freddie Mac, Ginnie Mae, and the other weird names were! The continuation of that title: the Debacle of Mortgage Finance essentially answers my question. It's something these experts in applied financial economics explained to me. Pretty much I gathered if you don't have to worry about it, then don't, just like my parents told me. I found it interesting, still, to get an idea of why people get so upset over an idea.

    5. Mary Beth

      This book gets a 4 not because it's a good read -- it's dry as hell -- but because it's very, very informative about the details of Fannie and Freddie Mac. Some very good advice at the end, too.

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