Tim Fernholz rounds up the latest in the discussion of Fannie and Freddie, the Government Sponsored Enterprises [GSEs]. Barney Frank is trying to get rid of the implicit / explicit government guarantee, which is very hard to do in the current climate. Alyssa Katz has an editorial in Politico where she points out the silence in terms of GSE policy, and walks through why it is important for the mortgage market post-crisis to get a sense of how the GSEs will work. She alludes to this study by Center For American Progress, Principles to Guide Development and Regulation of a Renewed Mortgage Finance System. I want to post this video of Raj Date’s presentation on the GSEs, taken from our report. I think he got to the heart of the problem: an institution can provide liquidity, or an institution can extend credit, but it can’t do both very well. [Read the full article]

A Massachusetts real estate investment firm bought a 306-unit apartment complex in Hunters Creek for $26.5 million. Burlington, Mass.-based Panther Orlando/Venue LLC bought the Venue Apartments complex off Central Florida Parkway from the Federal Deposit Insurance Corp., which had taken over as receiver for the property from IndyMac Federal Bank, according to Orange County records. This is the first Orlando-area property for Panther Properties Investment LLC, which secured a 10-year Freddie Mac loan through Deutsche Bank Berkshire Mortgage, said a news release. Cushman & Wakefield’s Orlando Apartment Brokerage Services team represented the FDIC in the sale, which closed Jan. 25. The project, developed in 2005 by Wood Partners as the Alta Grande apartments, sold for $49.3 million in May 2006 to Illinois firm Hawthorne Grande LP, which intended to convert the units to condominiums, as previously reported by Orlando Business Journal. [Read the full article]

From a story by Diana Olick at CNBC late yesterday on the possibility of the federal government getting behind a large-scale program to reduce principal balances on underwater mortgages comes a keen observation from housing consultant Howard Glaser. Home prices have fallen so far in the hardest hit areas, the areas where the bulk of the troubled loans are, that banks would have to write down principal 30 to 50 percent to put borrowers back in the green. Accounting rules require that banks write down the value of those loans on their books, and experts tell me that if banks really accounted for all the losses in the home loan market, they'd all be insolvent. [Read the full article]

Everyone has a theory about the financial crisis, Paul Krugman writes in his latest Op-Ed piece in The New York Times. These theories range from the absurd to the plausible" from claims that liberal Democrats somehow forced banks to lend to the undeserving poor (even though Republicans controlled Congress) to the belief that exotic financial instruments fostered confusion and fraud. But what do we really know? Well, in a way the sheer scale of the crisis" the way it affected much, though not all, of the world" is helpful, for research if nothing else. We can look at countries that avoided the worst, like Canada, and ask what they did right" such as limiting leverage, protecting consumers and, above all, avoiding getting caught up in an ideology that denies any need for regulation. [Read the full article]