Abstract
ABSTRACT This article offers a vision of the future of the government-sponsored enterprises (GSEs) as mortgage utilities. The designation of the GSEs as systemically important mortgage market utilities preserves recent reforms that enable the entities to carry out their congressionally chartered mission while protecting taxpayers. We show that mortgage utilities can generate the stable profits necessary to attract private investors. If the GSEs are simply privatized, it will be difficult for these entities both to be profitable enough to pay for sufficient capital to protect the taxpayer and to do so at mortgage rates low enough to maintain broad access to the 30-year fixed-rate mortgage.
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