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Can Fannie, Freddie Deal Fix Housing?By MARTIN CRUTSINGER and ALAN ZIBEL, APposted: 43 MINUTES AGOcomments: 0filed under: MortgagesPrintShareText SizeAAAWASHINGTON (Sept. 8) - The government has just become one of the biggest players in the U.S. mortgage market. Mortgage Giants' Historic Bailout AP (2)5 photos Mortgage lending giants Fannie Mae and Freddie Mac, which own or guarantee more than $5 trillion in home loans, are being placed in a government conservatorship as they struggle through an extended housing slump. Combined, the two companies have lost about $14 billion over the last four quarters. (Note: Please disable your pop-up blocker)More Fannie, Freddie Coverage:• Taxpayer Impact• Obama, McCain React• What About Struggling Borrowers?• World Markets CheerFrom the Blogs:• Winners and Losers• New CEOs Come From Outside• Details of Fannie, Freddie Deal• Bad News for Lehman?The Bush administration announced Sunday it was seizing troubled mortgage giants Fannie Mae and Freddie Mac in a bid to help reverse a prolonged housing and credit crisis.But private analysts worried that it may not be enough to stabilize the slumping housing market given the glut of vacant homes for sale, rising foreclosures, rising unemployment and weak consumer confidence.Mark Zandi, chief economist at Moody's Economy.com predicted that 30-year mortgage rates, currently averaging 6.35 percent nationwide, could dip to close to 5.5 percent. That's because investors will be more willing to buy the debt issued by Fannie and Freddie - and at lower rates - since the federal government is now explicitly standing behind that debt."Effectively, the federal government has now become the nation's mortgage lender," he said. "This takes a major financial threat off the table."Officials announced that both Fannie Mae and Freddie Mac were being placed in a government conservatorship, a move that could end up costing taxpayers billions of dollars. |
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A video with a classic bit from "Scarface" imposed ontop of Cheney. |
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