Tuesday, January 31, 2012
Real Estate News
Associate Professor of Real Estate and Urban Land Development and James A. Graaskamp Center Academic Director Morris Davis appeared on Wisconsin Public Radio’s Joy Cardin Show to respond to questions from both the host and callers.
The segment used the report released by NPR and ProPublica the day before as a springboard for a discussion of Fannie Mae and Freddie Mac. The report characterized Freddie Mac as simultaneously betting against homeowners’ ability to qualify for refinancing and actually profiting from that inability.
“There’s always been a conflict of interest,” Davis said. “They have the stated objective of making home ownership affordable, but, in actuality, they were kind of reporting to their shareholders. They’re trying to make money, and in the process of trying to make money, they’re taking bets that homeowners won’t be able to refinance. And, in some sense, they control whether or not homeowners can refinance.”
Furthermore, Davis said he supported “shutting [Freddie Mac and Fannie Mae] down,” implying the federal government didn’t need to be “involved in housing and in mortgage markets.”
Click here to listen to the radio segment.