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The Editors

Fannie and Freddie Are on the Mend. It’s Time to Fix Them

Followers of the American housing catastrophe were greeted with encouraging news this week. Fannie Mae, the government-owned mortgage-finance company, reported a $2.7 billion first-quarter profit. For the first time since its 2008 government seizure, it didn’t need to tap the U.S. Treasury, even after paying a huge dividend. Freddie Mac, Fannie’s sibling, similarly reported a profit but needed a small infusion of capital after paying the U.S. a dividend.

These signs of renewal may offer a tempting excuse for President Barack Obama to hold off on reforming Fannie and Freddie. This would be a mistake.