From: joetaxpayer 
Newsgroups: misc.invest.financial-plan
Subject: Re: conforming mortgages
Date: Thu, 16 Aug 2007 12:41:20 -0500
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Mark Freeland wrote:
> Alan Greenspan, 2004. 
> http://www.federalreserve.gov/boarddocs/testimony/2004/20040224/default.htm
> 
> In other words, the quasi-governmental nature of the GSEs accounts for 
> lower-than-market costs of the loaned money - this is more than your "good 
> housekeeping seal of approval" due to mortgages meet higher standards.  Some 
> of that subsidy accrues to shareholders, some to homeowners.   What appears 
> in dispute is that partitioning, and not the existence of the subsidy.

First, Mark, thanks for the link. You continue to amaze me with the 
information backing up your position. I find this one line curious;
"The study also suggests that these institutions [FNMA and FHLMC] pass 
little of the benefit of their government-sponsored status to homeowners 
in the form of lower mortgage rates." And elsewhere in the quote it 
offers a best estimate of 7 basis points for the savings to the 
homeowner. A savings of $280 on a $400K mortgage.

I'll concede that it may indeed be a subsidy, if only because The 
Maestro says it's so.

JOE