600 days ago, the federal government placed into conservatorship Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs) that play a critical role in the U.S. home mortgage market. At the time, the Bush Administration said it wanted to shrink the two organizations by 10 percent a year.
Much like the wayward child who squanders his parents’ inheritance on a life out of control … only to realize his mistakes and ask for forgiveness … Fannie and Freddie each have returned to their original purpose of providing stability to the market and supply low- and moderate-income families the keys to housing and homeownership. Granted, the GSEs re-focused mission was not a result of a religious epiphany. It came about more like the result of court-ordered community service.
While lawmakers will no doubt be able to legislate away some of the risk of the same crisis happening again in the future, we need to be prepared to deal with the next one when it does come. The intervention and ongoing recovery of the GSEs over the past year and a half may have taught us something.
Here’s how...

In September 2008, Fannie and Freddie had roughly 5,000 employees each. You might be surprised to learn that since that time Fannie Mae has added nearly 1000 full time positions, and has 547 open, posted positions as of this week.  That’s a 30 percent increase from the time it first went into conservatorship.  Freddie Mac is not far behind.
By contrast, the Federal Housing Administration (FHA) and Government National Mortgage Association (Ginnie Mae) have actually shrunk over the same period, and have just 39 and one job openings respectively.
What’s up with these numbers?

Maybe it’s the fact that a quasi-governmental organization is far less encumbered and therefore more effective, even in conservatorship, at crisis management and resolution than a federal agency?  Fact is, Fannie Mae and Freddie Mac are not subject to and hamstrung by Federal Acquisition Regulations (FAR) and federal appropriations and budgeting.
Ambiguous and urgent problems don’t wait for federal procurement practices that could take many months to approve a required service provider.  The problem goes on even longer if an incumbent or disenfranchised responder protests. And yes, in the case of fully federal agencies, it actual does “take an act of Congress” to get the budget dollars to hire staff.
Bureaucracy is the enemy of judgment-based decision making. The GSEs now are instruments of public policy for reasons largely related to the expediency and scale by which they can things done. Part of that has to do with human capital, which they both have in spades, but much has to do with that fact that are not subject the federal procurement policies and restriction.
Arguing whether or not federal intervention into the housing crisis through programs like Making Home Affordable is a separate topic all together.  If you believe those programs were needed to stabilize the housing market and stave off the next Great Depression, then you need to consider that we would be in far worse shape if the GSEs had been nationalized and subjected to operate under FAR protocols.