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The Other Mortgage Market Bailout

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October 12, 2008 – Comments (1) | RELATED TICKERS: FNMA , FMCC

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The government continues its push to “rescue” the mortgage market.   Bloomberg outlines the latest plan, ordering Fannie and Freddie to buy $40 billion per month in underperforming mortgage bonds.   Amazingly, this is separate from the $700 billion dollar TARP plan.

This comes at a time when, despite the criticism over their handling of the mortgage market, Fannie Mae and Freddie Mac are getting larger, not smaller.   Their budget is increasing nearly 16% next year.   Given the poor management before and all the trouble since, one wonders if giving Fannie and Freddie more authority and control over the housing market is the right way to go.

1 Comments – Post Your Own

#1) On October 12, 2008 at 6:56 PM, rd80 (98.42) wrote:

It gets worse:  Fannie Mae to allow MBS Servicers to hold P&I

Wish my mortgage company would let me hold the P&I for them.

One wonders why Treasury even bothered pushing for TARP when they could have just funneled it all through Frannie Mac Mae. 

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