This is not very good news!
Fannie Mae and Freddie Mac, whose shift into the risky mortgage market has been driven by the government’s affordable housing mandates, is faced with millions “maybe billions” in problem loans.
The Office of Federal Housing Enterprise Oversight estimates that 40.6 percent of Fannie’s portfolio, a total of $292 billion, is in loans for low-income borrowers, first-time buyers, and people living in mobile homes and economically distressed neighborhoods are all likely candidates for mortgage foreclosure. Freddie owns $68 billion of these loans, some 9.5 percent of its portfolio.
That’s a lot of loans likely to cause problems. For all of us!
Foreclosures Rock Fannie Mae and Freddie Mac – By Dawn Kopecki, Business Week, by way of Realtor.org
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