A rescue plan that delivers more capital to LTC?
Both also appear to be in their death beds. But a new plan to keep them alive might also deliver some much-needed capital to this sector.
First, some background: Congress created Fannie May in 1938 to help a housing market upended by the Great Depression. Congress added Freddie Mac in 1970 to give mortgage lenders a continuous funding source.
Over the years, both have bought mortgages from financial institutions, which they have either kept in their portfolios – or bundled into bond packages.
Currently, they collectively back more than half of all mortgages created by our nation's banks. But their days may be numbered.
In recent years, the firms have cost taxpayers just shy of $150 billion in bailouts, if dividend payments are considered. Of the $117 billion in taxpayer bailouts Fannie alone has received, only $26 billion has been repaid.
Given these realities, it's no surprise that Washington insiders now treat Fannie and Freddie as personas non grata. The White House has laid out two possible post mortems. One scenario has the government creating smaller governmental or private entities to fill the void. A second option lets the private sector take over completely.
For their part, Congressional Republicans have favored proposals that simply close down Fannie and Freddie.
Second, both would be stripped of their special charters and government guarantee.
Moreover, a successfully executed reinvention would bring new capital to the senior living sector. And by the way, taxpayer funds would be fully repaid.
Imagine that: a plan that might actually make things better going forward.
Of course, Millstein does have a unique advantage. Unlike many people seeking our votes a week from Tuesday, he has focused on rebuilding a strong foundation.
Unfortunately, many of the people we hired to solve the problem can't seem to get past slinging the dirt.