David Fiderer has previously worked in energy banking for more than 20 years. Prior to then, he worked in international tax law. He has written extensively about the financial crisis and is currently working on several projects concerning housing finance. His e-book on Fannie and Freddie is currently being updated to include GSE policy under the Obama Administration and will be published in hard cover.
Fannie and Freddie are irredeemable failures, which must be abolished as the first step in any type of housing finance reform if current and former officials of the U.S. Department of the Treasury are to be believed.
In a speech last May, Edward DeMarco declared these truths to be self-evident: "Restoring Fannie Mae and Freddie Mac is not the solution. They failed and their business model failed. Going backwards to an obviously failed model cannot be dressed up with some promise of higher capital or explicit rather than implicit guarantees."
Because the FHFA drew down vast amounts of taxpayer funds to "pay" for accounting provisions that would later be reversed, the GSEs remained saddled with in senior preferred stock that paid a dividend rate of 10%, until that rate was revised upward.