Government-owned mortgage behemoths Fannie Mae and Freddie Mac could be converted into giant co-ops co-owned by Wells Fargo, Citigroup, JPMorgan Chase and Bank of America under one plan to be discussed today at a government summit aimed at determining the future of the government-sponsored entities.
The co-op is just one of the options that will be bandied about today as the US Treasury convenes to discuss the future of the companies that have become a roughly $150 billion headache to taxpayers and a nagging hangover from the market’s epic housing bust.
Placing Fannie and Freddie in the hands of big mortgage lenders and having the government charge lenders fees to provide guarantees on that debt is one of a handful of ideas that has been floated to fix a problem that continues to vex the economy even after President Obama signed into law sweeping changes in the financial regulatory landscape.
Moderated by Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan, today’s daylong summit in Washington represents a small step toward fixing the mortgage companies that guarantee nearly three quarters of the mortgages originated in the US.