Fannie, Freddie rescue gets big price tag as House vote looms
by Michaela Vargova
WASHINGTON - A Bush administration plan to bolster Fannie Mae (FNM.N) and Freddie Mac (FRE.N) - the two government-sponsored mortgage finance giants, is estimated to cost U.S. taxpayers $25 billion. Fannie and Freddie own or guarantee almost half of the nation's $12 trillion in outstanding residential mortgage debt and play an increasingly key role in the troubled American housing market. Shares fell sharply on the report's release but later recovered. Investors are concerned whether the two mortgage finance giants can weather a national housing slump.
New data on Tuesday showed home prices fell again in May, while Treasury Secretary Henry Paulson pushes for passage of the plan as a way to restore financial stability to the markets. Paulson wants to give Fannie and Freddie access, if they need, to cheap, government capital in the form of loans and possible equity investments by the government. However, the secretary underscored a little the importance of getting housing legislation finished.
Congress was pushing ahead a housing bill that was expected to include Paulson's proposals, as well as measures to establish a new regulator for the companies and to help distressed homeowners refinance into new mortgages. The bill also would include about $4 billion in grants to localities to buy and repair foreclosed properties in distressed neighborhoods.
The whole case has also the critics - at least one Republican lawmaker was public critical of Paulson's proposal. He is persuaded that it would give Fannie and Freddie an unlimited line of credit from the U.S. Treasury and so force the taxpayer to buy equity in the companies.
PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.<br><br><font size=2>These news are original content from young talents around the world and are selected for you by Chris Cantell.</font><br>
edited by Beata Biskova
New data on Tuesday showed home prices fell again in May, while Treasury Secretary Henry Paulson pushes for passage of the plan as a way to restore financial stability to the markets. Paulson wants to give Fannie and Freddie access, if they need, to cheap, government capital in the form of loans and possible equity investments by the government. However, the secretary underscored a little the importance of getting housing legislation finished.
Congress was pushing ahead a housing bill that was expected to include Paulson's proposals, as well as measures to establish a new regulator for the companies and to help distressed homeowners refinance into new mortgages. The bill also would include about $4 billion in grants to localities to buy and repair foreclosed properties in distressed neighborhoods.
The whole case has also the critics - at least one Republican lawmaker was public critical of Paulson's proposal. He is persuaded that it would give Fannie and Freddie an unlimited line of credit from the U.S. Treasury and so force the taxpayer to buy equity in the companies.
| by Michaela Vargova for PocketNews (http://pocketnews.tv) |
PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.<br><br><font size=2>These news are original content from young talents around the world and are selected for you by Chris Cantell.</font><br>
edited by Beata Biskova
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