Are Fannie and Freddie really worth it?
CNBC’s John Carney nails it right on the head:
Defenders of Fannie and Freddie insist that their role in making mortgages cheaper is vital to the market and expanding home-ownership.
Economists estimate that over the course of their lifetimes, Fannie and Freddie probably saved homebuyers $100 billion in mortgage payments. That compares very badly to the $145 billion in bailout funds they’ve already received — and horribly with the $386 billion the Congressional Budget Office says the companies will cost taxpayers over the next decade. Homebuyers got cheaper mortgages but at a very stiff price for taxpayers.
Several studies show that the benefit to mortgage rates is quite slight, perhaps as little as 20 basis points.