Removing Fannie and Freddie would matter little except that interest rates on 30-year loans would be higher, borrowers would have incentive to share interest-rate risk and forgo the valuable prepayment option, making homebuying slightly less pleasant but taxpayers better off and the system more stable.

normativepending

Speaker

Arnold Kling

Evidence Quote

it would be slightly less pleasant to be a buyer of a home it'd be more pleasant to be a taxpayer so and it would have a stability to the system that we could stop worrying about it all the time

Source

Arnold Kling on the Unseen World of Banking, Mortgages, and Government 07/5/2010EconTalk
Created: 6/13/2026, 7:04:06 PM

My Notes

Loading notes...