Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Quick Hits: Fannie, Freddie Suspend Foreclosures for Yuletide Season


Brief scrutiny of today's headlines.

Fannie Mae (FNM) and Freddie Mac (FRE), the mortgage-finance companies at the center of the current economic mess, wish you a happy holiday season.

The government-sponsored enterprises will suspend foreclosures and evictions from November 26th to January 9th.

The agencies own or guarantee about $5.2 trillion of the $12 trillion US home mortgage market and were placed under government control September 6th.

Fannie and Freddie are working with HOPE, a coalition of major US mortgage servicing companies organized by the government, to help borrowers who are at least 90 days behind in their payments reduce their monthly bills. Interest rates may be reduced for up to 5 years and repayment terms may be extended to as much as 40 years.

But Fannie and Freddie are being generous with other people's money. In the third quarter, the agencies reported losses totaling about $54.3 billion. Freddie says it needs $13.8 billion from the US Treasury to stay afloat and Fannie says it may need a handout from Uncle Sam early next year.

In September, US Treasury Secretary Henry Paulson created a $200 billion backup fund for Fannie and Freddie. He said failure of the companies threatened the stability of the US economy.

The housing market has been pounded by falling prices and rising unemployment. Prices in 20 major metropolitan areas declined in July at the steepest rate on record. Sales of previously owned homes fell in August to a rate about 30% below the peak reached in September 2005. Owners of about 765,000 properties have received default notices.

So thanks for the breathing space on foreclosures, Fannie and Freddie. When do we get the economy back?
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos