Bill would let Fannie, Freddie buy more loans

http://www.marketwatch.com/news/story/bill-would-let-fannie-freddie/story.aspx?guid=%7BE2C6036E%2D3B ^ | 9-10-07

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WASHINGTON (MarketWatch) -- Mortgage-buyers Fannie Mae and Freddie Mac would be able to buy more loans in an effort directed at helping both subprime borrowers and high-cost home markets under a bill introduced Monday by Sen. Charles Schumer. Under the New York Democrat's bill, about $72.5 billion would go toward refinanced mortgages for borrowers whose loans are about to reset to higher rates. The bill allows Fannie Mae (FNM:Fannie Mae News, chart, profile, more Last: 62.76+0.24+0.38%

4:15am 09/11/2007

Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: FNM62.76, +0.24, +0.4%) and Freddie Mac (FRE:Freddie Mac News, chart, profile, more Last: 58.75-0.56-0.94%

3:45am 09/11/2007

Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: FRE58.75, -0.56, -0.9%) to buy more mortgages in an effort to pump liquidity into the mortgage market. It lifts the cap on their mortgage portfolios by 10%, which Schumer says will free up about $145 billion to purchase new loans. The measure "will deliver a shot in the arm that could make refinancings possible for tens of thousands of Americans trapped in the subprime mess," Schumer said in a statement. At the same time, the bill allows the companies to buy loans that cost more than $417,000, which would free up liquidity in higher-cost areas of the country. The Bush administration has denied requests by Fannie Mae and lawmakers to let Fannie and Freddie buy more loans. Both companies have operated under limits since accounting problems have been exposed and they get back to regular financial reporting. The increases on the portfolio caps and loan limits would expire after a year.

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Measure sponsored by Sen. Schumer targeted at refinancing subprime loans

[CitizenUSA]

So, basically ignore free market realities and have government underwrite bad credit risks? That’s great. What a marvelous incentive for people to live responsibly.

[Jimmy Valentine]

I call "no dice". Fannie/Freddie already have portfolios substantially above what they are supposed to be maintaining. Greenspan before he retired recommended that they pull back their portfolio size.

My solution; cut their portfolio's in half and then fully privatize both and let them succeed or fail on their own/

Schemer (D-NY-Slimeball) wants to have the rest of us pick up the downside for the hedge funds and those who overloaded on ARMs.

[ikka]

Schumer wants to bail out Wall Street, not the individuals.

[Hydroshock]

Ding, Ding, Ding, we have a winner. That is who he represents, not the middle class.

[Moonman62]

My solution; cut their portfolio's in half and then fully privatize both and let them succeed or fail on their own/

They are already privatized. About the only thing that could be done to make them more private would be to end the special regulations governing them such as these caps.

[hripka]

A bigger bailout to create a bigger bubble!