The big secret in U.S. housing

Voters aren’t likely to hear much before the election about plans to end government support for two giants in home finance, Fannie Mae and Freddie Mac. Yet like house prices, the federally backed entities are on the skids – as is the whole idea of Washington continuing to aid investment in a market often treated like a big bet.

But a political campaign is the perfect time to ask candidates what should become of Fannie and Freddie – and the implied federal credit they enjoy that allows them to borrow at low rates, buying and reselling “bundled” mortgages on global securities markets on behalf of private investors.

Politicians don’t want to face such an issue, as it strikes at the heart of federal support for a now-precarious home mortgage scheme that benefits mainly the middle class

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