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liquidity crisis: The "Liquidity Crisis", "Economic Stimulus Package" and my "Sleeping Tiger" Theories! - 03/07/08 03:45 PM
 
What is the "liquidity crisis" and why does it exist?
Across most of the country, Fannie and Freddie currently purchase loans of $417,000 or less from lenders, and repackage these so-called "conforming" mortgages into securities sold to investors. Investors generally trust that these securities will be repaid, in part because they are backed by the government-sponsored entities, so there's been little interruption in consumers' ability to obtain conforming loans at low rates. Until the Economic Stimulus Package was signed into law, loan amounts over $417,000 were typically held onto as "portfolio loans" by banks or sold off as mortgage backed securities to … (4 comments)

 

Scott Gormley

Chico, CA

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Oak Valley Mortgage-California Home Loans and Refinancing

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