Posted by LeGianT on July 15, 2008
The $5 trillion mess
Fannie Mae and Freddie Mac were created by Congress to help more Americans buy homes. Now their shaky condition threatens the entire housing market.
NEW YORK (Fortune) — They own or guarantee $5 trillion worth of mortgages – nearly half of all the country’s outstanding home loan debt – and they’re crashing. But not everybody is convinced they should be.
Fannie Mae and Freddie Mac are struggling with an investor loss of confidence so great that, while they’re unlikely to go under, they could conceivably see their ability to function impaired. That would wreak yet more havoc on an already wrecked housing market – making loans tougher to come by and possibly pushing hundreds of billions of dollars in cost onto U.S. taxpayers…
Special Report: Mortgage Meltdown