Recently, Freddie Mac, a government-sponsored enterprise, sought approval from its oversight agency, the Federal Housing Finance Agency (FHFA), to purchase and guarantee second mortgages in the United States.While the business case for this proposal is deficient (for an excellent perspective on that, see the article by R. Christopher Whalen), I will discuss the economic and political premises behind this move and its possible consequences.What Does It Mean to “Nationalize Second Mortgages”?Understanding the single-family mortgage market in the US means realizing that there is no market in the real sense of that term. A whopping 70 percent of home mortgages in...