Can Fannie and Freddie Survive?
“Washington-based Fannie Mae and Freddie Mac, have lost a combined $3.1 billion between April and June,” according to an article in the Chicago Tribune today, August 20, 2008. “The two government-sponsored companies are the largest source of funding for home mortgages in the U.S,” the paper added.
Now we know that government can not, repeat, can not, afford for these lenders to go under.
So a rescue plan will be devised…probably by the end of the year.
And, who will pay? Why, you and me and every other tax payer. But, keeping these quasi-governmental companies alive is necessary, as they’re the only ones doing low down payment mortgages.
And we thought that a $3 billion loss was a lot of money. Wait till this is over…and the total will probably reach $5 billion.
Could this have been prevented? Yes…but that’s another story.
© 2008 Move UP to Naperville Blog, Eileen Landau