The nationalization of Fannie Mae and Freddie Mac was sung, although the Treasury secretary, Henry Paulson, has resisted using this mechanism until the last minute.
The support given by Paulson to mortgage the two companies last July has been insufficient to restore investor confidence in these two companies, which have an excessive size and a disproportionate weight in the mortgage market (concentrated almost 50% of the portfolio of U.S. mortgage).
His character hybrid public / private (they are private companies with a public mission-to facilitate access to housing-) could not last much longer, especially when there are already private firms performing the same activity.
And the serious impact that their bankruptcy would have on the mortgage market and real estate has prevented U.S. Paulson leave them one hundred per cent in private hands, so it was clear that the nationalization would occur sooner or later, as many voices warned in July. These two months have only served to prolong the agony of the two mortgage.
The nationalization, which will have a high cost to U.S. taxpayers and that may affect the presidential elections, will not be the end of headaches for Paulson, who has yet to decide what to do with Fannie Mae and Freddie Mac once are under the umbrella public, if Sanaa, trocar and return to the private sector divided into several smaller companies or keep them for life as an integrated government agencies with a size smaller and less ambitious targets.
It will be a difficult election, less than two months before the presidential elections. The success or failure of the nationalization determine what is the legacy of Paulson in the history of U.S. financial system.
