Five Years Later, Fannie Mae, Freddie Mac Remain Unfinished Business

One day government will stay out of things they have zero business in.
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Of all the temporary patches the U.S. government slapped onto the sinking financial system in September 2008—from pumping money into banks to rescuing insurer American International Group Inc. AIG -1.01% —none was more urgent to then-Treasury Secretary Henry Paulson than saving mortgage giants Fannie Mae FNMA +0.81% and Freddie Mac FMCC -0.88% .

“It was the single most important thing we did to prevent disaster—real disaster,” said Mr. Paulson in a recent interview. But five years later, he adds, “it didn’t occur to me that we’d be here with nothing done.”

Fannie and Freddie remain the largest single piece of unfinished business from the financial crisis. As record profits have replaced huge losses, some now question whether cosmetic changes could substitute for the more radical overhaul of the companies envisioned five years ago.



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