In order for our housing market to function, banks need to lend money. In order for banks to lend there needs to be liquidity. Fannie Mae and Freddie Mac were created to provide liquidity. They sell mortgage debt to Wall Street investors. If Wall Street investors don't believe Fannie Mae and Freddie Mac can honor their commitments, then they won't buy mortgage debt. If Wall Street won't buy, then there is no liquidity.

The United States leads the world in home ownership largely because of Fannie Mae and Freddie Mac. These institutions can not fail. That said, homeowners who bought too much house, choose poor loans or can otherwise not make their payments should not be given a bailout with taxpayer dollars.

The current mortgage problems will work themselves out of the system in the next 12 to 18 months. The mortgages made today are very good and are based on sound lending standards. What we need now is confidence in U.S. mortgage debt on Wall Street by shoring up Fannie Mae and Freddie Mac.

John Norman

executive director

Utah Mortgage Lenders Association

Murray