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Fannie Mae and Freddie in trouble

Started by Junkman
almost 18 years ago
Posts: 288
Member since: Jun 2008
Discussion about
If both these institutions have to increase capitalization, doesn't that mean they will charge more for their services thereby increasing the cost of a basic mortgage? Obviously, increase cost of mortgage has impact on housing/real estate? Is this just another nail in the coffin? http://www.nytimes.com/2008/07/11/business/11fannie.html?hp
Response by Junkman
almost 18 years ago
Posts: 288
Member since: Jun 2008

If Fannie and Freddie were unable to buy and back loans, banks would stop originating them and the pool of homebuyers would shrink, causing home prices to fall even further.

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