Government Take Over of Fannie, Freddie Imminent
- By:
- Bill Rice | September 06, 2008
This rescue has been heavily debated since the government gave Treasury Secretary Paulson the tools to directly inject cash into the trouble institutions. However, recent confidence yielded from Freddie Mac's successful issuance of debt and recent shake-up of the Fannie Mae executive suite seemed to restore some confidence to the market and shareholders.
However, swirling rumors of government takeover have sent the two entities stock plummeting.
The sudden shift into action is suspected to have been triggered by the recent leap in unemployment rates and the expected effects it will have on mortgage defaults and increasing foreclosures. This alarming unemployment report is expected to accelerate and already subtle trend in default data--even good credit borrowers are being hit by the weak economy and missing payments and losing there homes.
A related report by the Mortgage Bankers Association indicated that nearly 9 percent of all American homeowners are now late on a mortgage payment. These data points would combine to indicate that forecasted losses in Fannie and Freddie's portfolios could reach unmanageable levels for institutions to remain private and publicly capitalized.
Top government players Ben Bernanke, Federal Reserve Chairman, James Lockhart, Director of OFHEO, and Treasury Secretary Henry Paulson met with executives from Fannie Mae and Freddie Mac on Friday afternoon--thought to be a meeting to inform Fannie and Freddie management of the pending move to seize the two institutions.
According to Government Accounting Office figures, taking Fannie and Freddie into government control will cost taxpayers upwards of $25 billion. These monstrous mortgage institutions current own to guarantee over half of American's $12 trillion in mortgage debt.
Bankruptcy Reform Back on the Table
- By:
- Bill Rice - MortgageLoan.com | November 21, 2008
One of the earliest ideas for helping homeowners facing mounting mortgage debt and potential foreclosure on their home was to reform bankruptcy laws. The concept is now officially back on the table, introduced into the Congressional lame-duck session by Senator Richard Durbin (D-IL).
TARP is Closed for Relief Until Further Notice
- By:
- Bill Rice - MortgageLoan.com | November 20, 2008
Remember what a crisis the $700 billion mortgage market bailout was--the very existence of the American financial order hung in the balance.
Fixing the Housing Market, Lots of Ideas...Any Answers?
- By:
- Bill Rice - MortgageLoan.com | November 19, 2008
Almost a year into the dawning of the housing crisis (many chronologist are setting that around the January 2008 crumbling of Countrywide) ideas continue to flow, but few seem to be the answer. In fact, this seems to be the growing consensus--there is no silver bullet.
G-20 Lots of Motion, Will There Be Action?
- By:
- Bill Rice - MortgageLoan.com | November 18, 2008
The 20 most powerful industrial nations, and now the caretakers of an unprecedented global financial crisis, assembled in Washington DC over the weekend. Their mandate was broad and daunting--stabilize world markets.
FDIC Challenges Treasury with New Loan Modification Proposal
- By:
- Bill Rice - MortgageLoan.com | November 17, 2008
On the heels of the Treasury and Federal Housing Finance Agency's (FHFA) loan modification plan for Fannie Mae and Freddie Mac, the FDIC releases their own proposal. In this unprecedented, unilateral, and aggressive move by a Federal agency the FDIC is essential fighting a very public political battle directly with the Treasury and the current Administration.
Mortgage Rates Drop for Second Straight Week
- By:
- Bill Rice - MortgageLoan.com | November 14, 2008
Another week of dismal economic data have again pushed down mortgage rates. Freddie Mac reported Thursday that 30-year fixed-rate mortgages averaged 6.14 percent, down from 6.20 percent last week. This demonstrates a steep decline from 6.46 percent two weeks prior.
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