House Passes Fannie Freddie Legislation
Posted on Thursday, July 24th, 2008 | In Market Commentary, Stocks to WatchThe U.S. House of Representatives passed legislation on Wednesday, that’s aimed at preventing the implosion of Fannie Mae (FNM) and Freddie Mac (FRE). It passed by a vote of 272 to 152. Fannie and Freddie together guarantee about $5 trillion in mortgages. In comparison, the total U.S. government debt is about $9.5 trillion.
As a result of the subprime mess, the existence of both companies was threatened. As it stands, they are now beginning to take over foreclosed houses with a higher value than the new mortgages that they guarantee.
Among highlights of the bill:
Fannie and Freddie can now underwrite mortgages up to $625,000.
The treasury will extend existing credit lines to both companies for 18 months.
The Federal Housing Authority can guarantee $300 bil. in new loans to help struggling mortgagees refinance.
$15 billion in new housing tax breaks that include a $7,500 credit for first time home buyers.
A new regulatory agency with tighter supervisory controls for Fannie and Freddie.
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 About Daniel Shepard (http://www.navivest.com/blog)
Daniel Shepard is an Equity Analyst with Navivest, a stocks and options trading advisory services company that provides trading ideas on a subscription basis. |
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