Fannie and Freddie
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Fannie and Freddie
| Sat, 07-12-2008 - 8:41am |
Fannie, Freddie pose new threat to housing
Worries about mortgage giants' financial health could raise borrowing costs
Worries about mortgage giants' financial health could raise borrowing costs
The collapse of Fannie Mae and Freddie Mac shares came suddenly this week, as investors fled the two mortgage finance giants over worries they may not have the financial strength to weather the ongoing storm in the housing market. But the problems facing Fannie and Freddie have been building for years.
Those financial problems could, in turn, push the housing market into a deeper decline. The two government-sponsored mortgage companies, which hold a staggering $5 trillion in mortgages and mortgage-backed paper, have emerged as the primary source of funds for home buyers following the meltdown of the subprime mortgage industry.






