Obama backs away from Fannie Mae

last updated 8 January 2015

President Obama endorsed a push to overhaul housing finance giants Fannie Mae and Freddie Mac this week, in order to reduce the government’s role in the mortgage market. In a speech in Phoenix, Obama backed the thrust of a Senate proposal to shrink the two companies’ portfolios and remove the implicit guarantee of a federal government bailout. The bill would eventually replace the two companies with a smaller government agency funded by industry fees. Fannie and Freddie received $200 billion of taxpayer funds after collapsing in 2008. The days of guaranteed bailouts for bad investments are over, said the president. “It was heads we win, tails you lose,” he said. “And it was wrong.”