While the rescue of Fannie Mae and Freddie Mac was generally successful, there is still no end in sight to their conservatorship

Seven years ago the US government dramatically rescued the government-sponsored enterprises Fannie Mae and Freddie Mac, placing them into conservatorship, a situation that remains ongoing. In new research, W. Scott Frame, Andreas Fuster, Joseph Tracy, and James Vickery, assess the success of the rescue using five criteria. They find that while the agencies were able to support mortgage supply through the crisis and afterwards, the rescue was less successful in supporting the government’s macroeconomic objectives. While there is broad agreement that Fannie Mae and Freddie Mac should be replaced by a private system, there is no end to their conservatorships in sight.