BRINGING IT ALL BACK HOME: HOW TO SAVE MAIN STREET, IGNORE K STREET, AND THEREBY SAVE WALL STREET

This article argues that the most effective and constitutionally sound method of solving the mortgage crisis would be directing the Treasury Department to administer TARP through the Federal Housing Administration (FHA) and government-sponsored enterprises Freddie Mac and Fannie Mae The author contends that these were established precisely to deal with low-end mortgage financing and refinancing. However, the present crisis stems directly from intrusions on these institutions' original missions by under-regulated private firms. The author provides an overview of the causes of the mortgage crisis, the founding and functioning of mortgage finance institutions, and ultimately sketches how TARP would be channeled through these institutions.