Questions Surround Fannie, Freddie – By NICK TIMIRAOS – … Mahesh Swaminathan, senior mortgage analyst at Credit Suisse, said the firms could use their increased capacity to purchase delinquent loans from pools of mortgage-backed securities that they guarantee. … Others said the new flexibility means that Fannie and Freddie could replace the Fed as a big buyer of mortgage-backed securities, especially if weak demand for mortgage-backed securities from private investors drives rates higher. … – Wall Street Journal
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Expect More Bailouts in 2010 – Daryl Montgomery – has a list of all that will be in line – Seeking Alpha
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Fannie, Freddie, and full faith – Paul Krugman – … But I think it adds to our understanding if you think of Fannie and Freddie as being, in effect, in the same business as the Fed these days. That is, if you think about what the Fed is doing when it engages in “quantitative easing” — expanding its balance sheet by buying unconventional assets — you realize that it’s part of a broader provision of credit to the private sector by governmental or quasi-governmental agencies, which are ultimately financed or at least backstopped by public debt. … – NY Times
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The Price for Fannie and Freddie Keeps Going Up – By PETER J. WALLISON – Barney Frank’s decision to ‘roll the dice’ on subsidized housing is becoming an epic disaster for taxpayers. – Wall Street Journal Opinion
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VIEWPOINT: Treasury Updates GSE Support, and the Mainstream Misleads – By LINDA LOWELL – … More to the point, given the central role Fannie and Freddie now play in sustaining home sales and refinancings as well as in preventing liquidations through foreclosure (the force weighing on housing markets around the country), the Treasury had no choice but to lift the caps. Too much is at stake, for taxpaying homeowners, to leave outstanding even a small “tail risk” that one of the enterprises would penetrate the cap. … – long article, lots of good points – HousingWire