A Plan to Restructure and Transition
the Mortgage Industry
The U.S. mortgage system is critical to our housing industry and to the liquidity of our entire financial system. Government control of the system, however, puts the taxpayer at risk and adds debt to the nation's balance sheet. Private market control of the system exposes it to the profit motive, where markets will take greater risks for the sake of higher profits. It's a choice between the lesser of two evils.
There is a third option, and this is an effort to persuade you to support it. It will minimize taxpayers from the risk of loss and it will insulate the system from risks for profit. It will preserve traditional lending, keep housing finance affordable, protect mortgage investors, protect our retirement funds, and provide for strong and stable mortgage market liquidity. It's a fairly simple solution to a complex set of problems. All it needs is your support.
The solution is simple: Convert Fannie Mae and Freddie Mac into non-profit corporations. Non-profit corporations can be extremely profitable, but as long as they serve a social mission, their profits are non-taxable. This would allow the agencies to actually bank all of their net profits and use them to actually guarantee the loans that they guarantee with an ever-expanding mountain of cash reserves. The PDF below is a proposal put together in 2011 to replace Fannie and Freddie, but the fundamental aspects of the benefits of converting them to non-profit corporations remain the same.
There is a third option, and this is an effort to persuade you to support it. It will minimize taxpayers from the risk of loss and it will insulate the system from risks for profit. It will preserve traditional lending, keep housing finance affordable, protect mortgage investors, protect our retirement funds, and provide for strong and stable mortgage market liquidity. It's a fairly simple solution to a complex set of problems. All it needs is your support.
The solution is simple: Convert Fannie Mae and Freddie Mac into non-profit corporations. Non-profit corporations can be extremely profitable, but as long as they serve a social mission, their profits are non-taxable. This would allow the agencies to actually bank all of their net profits and use them to actually guarantee the loans that they guarantee with an ever-expanding mountain of cash reserves. The PDF below is a proposal put together in 2011 to replace Fannie and Freddie, but the fundamental aspects of the benefits of converting them to non-profit corporations remain the same.
| summary__plan_for_mortgage_mkt_restructure_and_transition_8_13.pdf |
To read about Rick's earlier efforts with a Texas solution, please go to Rick Baron's Blog
