House Passes Housing and Economic Recovery Act of 2008
July 25, 2008 Leave a comment
We have all been hearing a lot in the news about Fannie Mae (Federal National Mortgage Association) and Freddie Mac(Federal Home Loan Mortgage Corporation) and how they are close to collapsing. Both of these entities are Government sponsored enterprises (GSE) of the United States federal government and are stockholder-owned corporations, authorized to make loans and loan guarantees.
Fannie Mae and Freddie Mac were hit pretty hard by the subprime mortgage crisis of late 2007 and 2008 which prompted the government action. On July 13th Secretary of the Treasury, Henry Paulson Jr., issued a statement saying that
“Fannie Mae and Freddie Mac play a central role in our housing finance system and must continue to do so in their current form as shareholder-owned companies.”
Yesterday the House passed H.R. 3221 and it is expected to pass the Senate. The President is expected to sign it and if so, this law will spare hundreds of thousands of homeowners from foreclosure and bolster the troubled mortgage giants, Fannie Mae and Freddie Mac.