D.C. Area Hurt if Fannie Mae, Freddie Mac Close
(Washington Business Journal) — A disbanding of D.C.-based Fannie Mae and McLean-based Freddie Mac, as some in Congress and the White House seek to do, could send ripples throughout the D.C. economy, where the companies have some 10,000 employees, support hundreds of local nonprofits and occupy 3.5 million square feet of office space. The Obama administration and a number of Republicans in Congress have proposed scrapping the mortgage financing giants, which landed in federal conservartorship in July 2008. It’s not clear what, if anything, would replace them. Representatives from both Fannie Mae and Freddie Mac declined to comment on the proposal. The local impact depends largely on how quickly any dissolution would happen, said Stephen Fuller, director of the Center for Regional Analysis at George Mason University. “If they just decided to close them outright Jan. 1, 2012, it would have a major impact,” he said. But such a move is unlikely because it could destabilize the housing market. It’s more likely that many of the companies’ functions, and some of their employees, would be shifted into the Department of Housing and Urban Development or the Federal Housing Authority, Fuller said. Freddie Mac is the third-largest private employer in Fairfax County, behind Booz Allen Hamilton Inc. and Inova Health System. In 2009, Fannie Mae was the eighth-largest employer in the District — the only company in the top 10 that was not a university or hospital. For many of the high-finance types working in the capital markets at Fannie and Freddie, their local job prospects might be slim, said Lyles Carr, senior vice president at search company The McCormick Group Inc.