In no other time would this make any sense. But now, if the government didn't continue its trillion-dollar bailout of Fannie and Freddie, mortgage rates would soar. That would kill the feeble housing recovery and probably result in even more foreclosures. Through Fannie and Freddie, the government has financed 75% of new U.S. mortgages this year. Where would the mortgage market be without that source of funds?
A Higher Cap on Portfolio Size
So far, the government has bailed out Fannie and Freddie with $1.5 trillion in direct and indirect aid. Fannie's and Freddie's Christmas present included the government telling them they could retain their portfolios as long as their holdings didn't top $900 billion. At the end of October, Fannie's was $771.5 billion and Freddie's was $761.8 billion.
Treasury had previously said Fannie and Freddie would need to shrink their portfolios by 10% a year. Now, they won't actually need to trim their portfolios at all for at least another year. And should their portfolios get near that $900 billion cap, don't be surprised if Treasury raises it again -- especially if the housing industry hasn't recovered.
As part of the government support for the two companies, the Federal Reserve has bought $1.1 trillion of Fannie's and Freddie's home loan bonds and $124.1 billion of their corporate debt. The Fed's stepping in where few private investors would be willing to go is aimed at keeping mortgage rates low. The strategy has been working: At year's end, a 30-year fixed rate mortgage was about 5.04% -- down from 6.05%. If the Fed pulls out, mortgage rates would likely jump back up quickly to around 6%.
A Split-Up in the Future?
Despite the big jump in share prices at the news, if you're a Fannie or Freddie stockholder, don't get too excited. The government still holds 80% of the two companies. And now, with decisions about their fate postponed for another three to five years, the stocks aren't likely to see any major improvement any time soon.
Many critics are pushing for both companies to be split up, with the largest segment -- support of government housing policy -- remaining under government control. If and when Fannie and Freddie finally do leave government conservatorship, they're likely to be much smaller, leaner companies.
Where is the help for all the Unemployed Homeowners out here struggling every day trying to find jobs just so they can keep their homes? All these programs for modifications, HAMP etc. do not address the Unemployed homeowners who by the way lost their jobs to no fault of their own!
Mr. President when will you do the right thing and help those of us that want to work but are loosing our homes?!
Where is the help for all the Unemployed Homeowners out here struggling every day trying to find jobs just so they can keep their homes? All these programs for modifications, HAMP etc. do not address the Unemployed homeowners who by the way lost their jobs to no fault of their own!
Mr. President when will you do the right thing and help those of us that want to work but are loosing our homes?
Where is the help for all the Unemployed Homeowners out here struggling every day trying to find jobs just so they can keep their homes? All these programs for modifications, HAMP etc. do not address the Unemployed homeowners who by the way lost their jobs to no fault of their own!
Mr. President when will you do the right thing and help those of us that want to work but are loosing our homes?
Where is the help for all the Unemployed Homeowners out here struggling every day trying to find jobs just so they can keep their homes? All these programs for modifications, HAMP etc. do not address the Unemployed homeowners who by the way lost their jobs to no fault of their own!
Mr. President when will you do the right thing and help those of us that want to work but are loosing our homes?
1. Term Limits: 12 years only, one of the possible options below.
A. Two Six year Senate terms
B. Six Two year House terms
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Term limits is a dream of people who are too lazy to get off their butts and Vote.
Why would anyone want to get rid of a good Senator or Congressman who is serving them well and take a chance that the next guy will also serve them well???
Would you change doctors or dentist who are serving you well every few years???
We already have term limits___It i called the "Voting booth". The people are always free to vote for someone else if they do not like who they now have. But you have to get off your lazy butt and register and VOTE. Term limits would only ENCOURAGE corruption. Because if they know in advance their term is going to expire they will grab all they can grab before they are pushed out. People re-elect the same person over and over again sometimes___Because they like the person and want the person for their representative...Term Limits would deny the people the right to vote for who they like the most. Freedom___Is Freedom to vote for who we like most___not pushing out the person who we like the most.
In a Democracy The Majority Rules. And if the majority in any state like their Senator or Congressman, then they deserve to have the person they want.