Fannie, Freddie Cleared To Pump $200 Billion Into Market

[Purveyor]

Source: Reuters

WASHINGTON (Reuters) - The regulator of Fannie Mae and Freddie Mac on Wednesday eased capital requirements for the two biggest housing finance agencies, allowing them to pump up to $200 billion into the distressed U.S. mortgage market.

The regulator, the Office of Federal Housing Enterprise Oversight, said it was lowering to 20 percent from 30 percent the amount of extra capital the companies are required to hold. It will also consider further reductions. The 30 percent requirement had been imposed after the discovery of lax accounting and risk controls earlier this decade.

In addition, the companies will begin to raise "significant capital," OFHEO said in a joint statement with Fannie Mae and Freddie Mac. Last year, the companies sold nearly $14 billion in preferred stock.

The extra $200 billion would allow Fannie Mae and Freddie Mac to purchase both existing mortgage-backed securities and new home loans originated by banks. It could also enable them to increase their business of guaranteeing mortgages, a key to helping pull the U.S. housing market out of its funk.



Read more: http://www.reuters.com/article/domesticNews/idUSN1928966020080319

[natrat]

1. is this allowing even more leverage, seems like allowing more risk

[aquart]

2. Yep. That's my reaction, too.

Don't want the dam to burst till December?

[TreasonousBastard]

3. Hmmm... One of the problems with restructuring...

mortgages to lower interest rates on ARMs is that the securities holders are threatening lawsuits if their anticipated returns are left on the table.

This seems to allow some flexibility int working out terms on a lot of mortgages. How many? I have no idea, but anything that helps reduce terms back to what homeowners can afford is a worthwhile project.

(Isn't that what half the people around here are screaming for?)

[librechik]

4. It's going to get harder and harder to ignore the families living in their cars

and the empty houses...

BUT THE BANKS AND BAKERS WILL BE DOING GREAT AS USUAL!!!

[Magleetis]

6. Thats right

Keep the rich folks flush with cash. Keep those gas prices rising.

[whistle]

5. How does this help troubled homeowners?

[hatrack]

7. It doesn't.

It just keeps the bubble inflated just a little while longer, just one more year, just one more quarter pleasepleaseplease . . .

Ridiculous.

[Phred42]

8. Just devaluing the dollar even more. PAssing even more debt

to our children and grand children. assuming the country will hold together that long.
This won't fool anyone outside of this country. More corporate welfare

[PSPS]

9. WHat are we up to now? $700 billion in taxpayer money given to these fraudsters?