Eliminating government-backed mortgage companies Fannie Mae and Freddie Mac is a bad idea for the U.S. economy, says Richard X. Bove, equity research analyst at Rafferty Capital Markets. Bove contends reforms that would put the companies out of business will lower home values, make it harder for home buyers to secure mortgages, and dampen the national economy. “For eight decades, the system that they represent was successful in allowing tens of millions of Americans to own their own homes,” Bove says. “The system was abused by politicians, regulators, and bankers beginning in the mid-1990s and this led to the downfall of these two giant companies.”
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